Karnataka Small Dal Mills Shut due to Losses

Karnataka, also known as the ‘dal bowl’ of India, faced a major blow due to prevailing low prices. Many small dal mills in Karnataka shut due to losses. It is a matter of concern for the Karnataka government to curtail this situation.

Government Intervention

Few years back prices of pulses skyrocketed and ever since government intervened in the industry. Sowing of pulses increased throughout India which led to continuous fall in prices this year. The Central government intervened and purchased Dal directly from farmers at the minimum support price (MSP).

The Government sold dal under Public Distribution System at Rs 35 per kg in the open market. Bringing down prices heavily in Karnataka. Government intervention in any industry decreases profits significantly. Small Dal mills are unable to offer high rates to farmers thereby, unable to compete with government.

Pulses Import Regulation

On 1st April 2019, Government issued notice to restrict import of peas and pulses. They further restricted import of moong dal to 1.5 lakh tons for fiscal year. Further, import of Tur Dal quota restricted to 2 lakh tons. Government regulation of import was necessary to curtail the falling prices of pulses in India.

Districts Under Stress

Currently, only 60 dal mills are operational out of the 400 mills in Kalaburagi and Yadgir districts. Due to this shutdown major unemployment issues have prevailed in the districts. Dal Mill owners revealed that it is not feasible to sell dal at such a low prices due to high cost of processing.

Reasons for Shutdown

Amarnath Patil, president of Karnataka Chamber of Commerce and Industry stated that long term affect of demonetization has further bought down the performance of dal mills. National Agriculture Cooperative Marketing Federation of India stated reasons for shutdown as high price volatility in dal market.

Hence, the government’s action to stabilize prices of dal is successful but at the same time has impaired the dal mills.

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