SATrends Issue 85
December 2007
1. Chickpeas heading southwards
Asha in Philippines

During the past thirty years, dynamic changes in chickpea area and production have occurred in India resulting in a shift in the center of production away from the traditional growing areas in northwest and northeast India to central and peninsular India. Between 1965 to 2004 the chickpea area in Uttar Pradesh, Bihar, Haryana, Punjab and West Bengal declined from 4.3 million ha to 1.1 million ha while its production fell from 3.1 million t to 1.0 million t. In contrast, there has been expansion in the area under chickpea in Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh, Chhattisgarh, and Maharashtra, from 2.2 million ha (1965-69) to 4.2 million ha (2004-05) and production from 1.0 to 3.2 million ha (Figure 1).

These changes are also observed at the more disaggregated district level. This is substantiated by the change in ratio of chickpea area between 1966 and 2004 (area in 2004/area in 1966) with area decreasing significantly in 119 districts (ratio<0.85), increasing in 69 districts (ratio >1.15) and remaining constant in only 11 districts (ratio 0.85 to 1.15). These changes also allude to greater specialization of chickpea area. For instance, in 1966 the top 50 districts accounted for 63% of chickpea area in India, while in 2004 the top 50 districts accounted for 73% of chickpea area indicating greater relative concentration.

Chickpea in Myanmar ICRISAT researchers in a chickpea field.

The productivity of chickpea has not gone down despite being relegated to marginal and high-risk prone areas with shorter growth cycle due to terminal drought. On the contrary, it increased by 1.7% in the central and peninsular India and is now at par with the yield levels in the traditional growing areas (Figure 1). This was possible due to development of improved varieties of early maturing desi and kabuli chickpea cultivars tolerant to heat stress and with resistance to Fusarium wilt leading to higher and stable yields. However, managing the insect pest Helicoverpa (a pod borer) is essential to harvest reasonable yields. Also, chickpea breeding programs need to focus on the most preferred quality traits such as grain size, color, texture, type and cooking quality with a view to satisfy consumer preferences (hence market prices), which vary from region to region.

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2. Prices perking up

The real prices for agricultural commodities at the global level have declined by about 2% between 1970 and 2005. Of the broad commodity categories, pulses have experienced the sharpest decline in prices, with export prices declining by 4.6%; followed by oilseeds (3.8%) and cereals (1.9%). In general, prices increased in the seventies, declined in the eighties and the nineties, and gradually recovered in 2000-05.

Chickpea in Myanmar

Prices for the ICRISAT mandate crops have shown similar trends. For example, the price of sorghum decreased by 3.6 % per year in 1970-2005, but increased by 2.05% per year in 2000-05; millets by 2.57% and 7.08%; chickpeas by 3.45% and 1.1%; groundnuts (shelled) by 2.64% and 1.2% respectively (Figure 1).

As much as 75% of the global production of the ICRISAT mandate crops come from developing countries. Interestingly developing countries are the main importers of chickpea and pigeonpea, while developed countries account for bulk imports of groundnuts.

Among ICRISATís crops, sorghum is the most traded crop by volume with 5.4 million tonnes (8.9% of its production) being exported in 2005; millets formed the least with less than 0.4 million tonnes (1.1% of its own production) being exported. Much of the global trade in sorghum and millets is for feed use and the increased demand for dairy and meat products, and availability of substitutes like maize would be the main drivers of their prices. The price difference between sorghum and maize is narrowing, an indication of growing demand for sorghum (Figure 2). Sorghum and maize prices registered an increase in 2006 after a small dip in 2005.

Chickpea in Myanmar

India is the main importer of chickpea and pigeonpea, and these imports have been a major determinant of the world prices of these commodities. For groundnut, despite the growing demand for edible oil and protein meals, the import demand has been declining during the last several years, perhaps due to growing stringent quality specifications against aflatoxin contamination.

The years 2006-07 have seen a further increase across the board in the prices of all agricultural commodities. While supply shortages and low worldwide stocks due to consecutive bad harvests in major producing countries account for some part of the spike in prices, the increasing trend is expected to be sustained over the next decade thanks to more systemic changes in the demand structure stemming from income and urban population growth in the emerging markets of Asia, Latin America and Africa. Additionally, the increased demand from the bio-fuel industry has increased all the agricultural commodity prices and is expected to continue to do so in the medium term.

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3. Making markets work for smallholder farmers

Sorghum and pearl millet are generally grown by resource poor farmers (owning less than 2 ha land) in semi-arid and marginal environments. Sorghum grain generally used as food, is also used as poultry and livestock feed, and for manufacturing alchohol and starch. In recent years, demand for non-food uses of sorghum is growing, the main constraint to industry being the lack of availability of sorghum in bulk quantities and assured supplies. The combined effects of supply, demand and policy factors have often depressed the prices of sorghum in relation to other grains. The dispersed pattern of production implies that marketing costs can be high when left to individual producers and the transaction costs of collection from individual farmers are also high and hence non-remunerative to the processors/ traders.

ICRISAT is implementing a project with funding support from CFC/FAO in collaboration with partners/stakeholders from India, China and Thailand. The main objectives are to increase production and productivity of sorghum and millet through supply of improved cultivars; package of practices reducing per unit cost of production; developing infrastructure at villages for drying and storage; formation of Farmersí Associations; training farmers in scientific storage methods, grading and bulking of grain, and improving supply chains through backward and forward linkages with input suppliers and processors.

West African millets and sorghums Farmers about to transport bulked produce to the market.

Timely harvesting, drying, scientific storage, grading and bulking practices enhanced the quality of grain, further adding to their value. The backward and forward linkages was a win-win situation for both the farmers and the end users. Backward linkages assured easy access to improved technology, quality inputs and formal credit (low interest rates); while the forward linkages led to easy access to markets, improved bargaining power, lower marketing and transaction costs and farmersí access to market information.

For the processor it meant reduction in transaction cost, assured supply of produce, guaranteed purity and origin ensured (grains from particular locality with specified qualities), and overcoming seasonality (making grain available to some extent during all seasons). The Farmers Association members facilitate the bulking of grains by the members in the godown, participate in the buyers meet, discuss procurement projections and negotiate prices on a regular basis apart from the negotiations with the bankers for produce market loans for the stored produce.

The model of bulk marketing is now being enhanced with formal / informal agreements between the Farmers Association and the poultry feed manufacturers. The alcohol manufacturing industry is also tying up with farmers for the purchase of grain. The upscaling of this model will benefit small-scale sorghum and millet producers.

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