Tur dal industry in soup: Over 300 mills shut down in Kalaburagi

Bengaluru: The Centre’s market intervention policy seems to have gone awry with the red gram (tur dal) industry, considered an evergreen business till recently, suffering heavily for the first time in 20 years. Over 300 of the 400 dal mills have shut shop in Kalaburagi district, the dal bowl of Karnataka. In Maharashtra, only 200 of the 700 mills are running to full capacity.
“It’s a crisis which requires authorities’ attention.The dal industry is incurring losses, not for business reasons but due to the government’s policy,” said Santhosh G Langer, executive member of Hyderabad-Karnataka Federation of Chambers of Commerce and Industry.

In just three months, defaulting mills have resulted in banks’ non-performing assets (NPA) going up by Rs 600 crore. The State Bank of India has issued an advisory to its branches not to disburse fresh loans under its Dal Mill Plus Scheme. “ Due to the high NPA level, no new sanctions shall be considered under the scheme till the next review,” its advisory read.
It all started in 2016-17 when the Centre launched a market intervention scheme to procure raw tur at a minimum support price (MSP) of Rs 50.5 per kg. While the country produces, on an average, 487 lakh quintals of tur annually, the Centre procured 125 lakh quintals that year. The MSP was raised to Rs 54.5 per kg in 2017-18 when the government bought another 85 lakh quintals. With its warehouses saddled with mounds of the produce, the Centre began releasing raw tur into the open market to be sold at Rs 35 per kg, in a bid clear its inventory. This was apart from the dal being distributed under the public distribution scheme (PDS) for Rs 35 a kg.
“The government’s move to release raw tur at Rs 35 per kg is destabilising the dal industry,” said Nitin Kalantri, managing committee member of All India Farmers Traders Association (AFTA). “With input cost, including that of manufacturing dal from raw tur coming to around Rs 60 a kg, mill owners and traders cannot afford to compete with the throwaway government price,” he said.
In Kalaburagi, the Centre procured 35 lakh quintals of tur dal this March, leaving more than 45 lakh quintals unsold.
Kalantri said AFTA has written to the government seeking a course correction, while both farmers and traders have urged the Centre to raise tur prices in the open market so that there is a level-playing field.
OFFICIAL TAKE
National Agriculture Cooperative Marketing Federation of India Ltd said prices in the open market cannot be raised at this stage as it is about government policy. “The government has decided to clear stock piling up for two years. While we are sympathetic towards tur traders and farmers, the change of prices is not in our hands,” said chairman VR Boda, chairman.
Sanjeev Kumar Chadha, managing director, said traders must allow market dynamics to regulate prices. “We told the stakeholders that the market is looking up and it’d take a week or so for the prices to go up. Till then, they have to wait.”
IMPORT THREAT
The Centre’s import policy is set to hit the dal industry further. According to an agreement Prime Minister Narendra Modi has entered into with African countries, India has to import at least 15 lakh quintals of tur, about 10 lakh coming from Mozambique alone. “The imported dal is expected to arrive in a month or so and will cause further crash in prices,” said Ramesh Chandra Lahoti, president of Bangalore Wholesale Pulses and Foodgrains Association.