Valued equally by both chefs and home cooks, the pure basmati rice of the border belt of both Punjabs, is famous world over.Basmati rice is a unique commodity, which can grow only in certain specific areas of Pakistan and India.
Government realizes the significance of Basmati in improving ties between India and Pakistan. It was in view of that the government had signed a MoU with Agriculture Food and Processed Export Development Authority for setting up agriculture export zone for basmati few years ago, but it is yet to take off. The MoU was signed to protect and promote Basmati rice produced in the border districts of Punjab. The Contract farming, introduced by the Punjab Agro Food Corporation sometime back to promote basmati with great fanfare, has come a cropper because the government failed to act as a catalyst
However, rice exporters are today a worried lot and say that rice exports from world's second-biggest grower of the grain, India in general and Punjab and Haryana in particular may fall this year as rice had lost its competitive edge in view of the policy of Minimum Support Price (MSP) prevailing in the country. The MSP on rice this year was 610 per quintal. Add Rs 40 as bonus given to the farmers over an above the MSP, the rate comes to Rs 650 per quintal. Add processing charges and the rice from Punjab and Haryana becomes uncompetitive for exports
Pawan Kamra, Managing Director of Raj Agros, a leading Rice Exporter says that exports in the year ending March 31, 2008 , may drop at least 20 per cent from 3.6 million metric tonne shipped last year. Reduced shipments from India may help Thailand, Vietnam and Pakistan boost their share of the world rice market and extend the past year's 28 per cent gain in rice on the Chicago Board of Trade. India exported 4.5 million tonnes of rice in 2006-07 pegged at Rs 8,000 crore. Out of this, Basmati exports alone were valued at Rs 3,500 crore by selling 1.1 million tonnes, while non-basmati rice were about 3.5 million tonnes, according to latest estimates by the All India Rice Exporters Association.
Rice Exporters say that problem was more prominent in case of Punjab and Haryana as MSP was enforced completely in these two states. Little doubt that millers were forced to buy rice at this rate from the farmers. However, in other states the MSP was not that strictly enforced and millers could buy rice at market rates from mandis.