Assessing performance of pulses and competing crops based on market prices and natural resource valuation

Abstract

Cultivation of pulses in India has been pushed to less favorable production environment during the last four decades due to decline in their relative profitability for producers. Policies like subsidies on chemical fertilizer and irrigation have raised margin of some crops over pulses. Though subsidies benefit users (farmers) their cost is borne by the society. Thus, real comparison of income or profitability from various production activities from long term and society's perspective should include social cost and benefits. Contribution of pulses to society is not appropriately assessed if it is based solely on market prices of input and outputs. Pulses contribute to society and environment through various means. In the production process, pulses improve soil fertility by fixing the atmospheric nitrogen into the soil. They reduce the need for fertilizers and enhance the arable quality of the soil. The paper compares net income from pulses and other crops at existing market price, economic prices which net out effect of subsidies and in terms of natural resource valuation which take into account effect on natural resources and environment. Pulses are found to be more paying than the competing crops on overall basis though they generate lower income at market prices. Crop shifts in favor of pulses is found to be environment friendly as pulses cultivation involves much lower emission of Green House gases compared to other competing crops