Orissa Resists Demand For Direct Paddy Purchase From Farmers

Bhubaneswar: | Updated: Jun 24 2002, 05:30am hrs
It is an unpopular decision that may dent the pro-farmer image of the Orissa government. But Naveen Patnaik’s government, refusing to buckle under pressure from the farmers’ lobby and the Opposition, has decided not to go in for the paddy procurement business. The farmers’ lobby and the Opposition said that distress sale of paddy had hit the peasants in the state as the Food Corporation of India (FCI), rice millers and various agents had formed a clique and were not procuring paddy at the minimum support price (MSP).

However, the maximum pressure on the government has come from the judiciary. The Orissa High Court, acting on a public interest litigation (PIL) filed by one Nakul Kishore Merli, has passed an interim order directing the state government as well as FCI to directly purchase paddy from farmers in Bolangir district. FCI has, meanwhile, started procurement in the district.

However, the government has decided to move the Supreme Court challenging the HC directive. In a special leave petition, the state government has stated that the court directive was an interference in the policy decision of the government and a violation of Article 14, Part III, of the Fundamental Rights laid down in the Constitution. The government has cited the recent SC judgement on Balco privatisation to drive home the point.

As per the Orissa Rice & Paddy Procurement (Levy) & Registration of Sale and Movement Order 1982, under Section 3 of the Essential Commodities Act 1950, the millers and agents will procure paddy from the farmers and sell it to FCI after conversion to rice. The government has also argued in favour of its stand not to dabble in the paddy procurement business. It said it neither had the financial muscle nor the infrastructure for such business. It cited the bitter experience of Chhattisgarh and West Bengal in this regard. Chhattisgarh is expecting a loss of Rs 400 crore in the paddy procurement business, while West Bengal, which has procured 40,000 tonnes of paddy, is facing a liquidity problem.

In addition, the government has already tasted the bitterness of the business. On an experimental basis, the Regulated Marketing Commit-tee of Dungripalli in Sonepur district had procured paddy directly from farmers two years back. But the stock could not be sold to FCI for the paddy was found not to be of Fair Average Quality (FAQ) standard. As a result, the loss is estimated at about Rs 40 lakh.

The government also filed a counter-affidavit in the HC last Thursday explaining its inability to take up direct paddy procurement. “We don’t have the funds, the required skilled manpower and the infrastructure to go for direct purchase of paddy from the farmers”, state food and civil supplies secretary Jogendra Patra said.

However, in an interesting development, the Bargarh collector, Aparajita Sarangi, better known as the Kiran Bedi of Orissa, has started procurement of paddy directly from farmers. Ms Sarangi, who is the president of the Bargarh Central Cooperative Bank, has sanctioned Rs 10 crore and has engaged the Primary Agriculture Co-operative Societies for procurement (PACS). The farmers are paid the MSP after their outstanding dues are adjusted. But Ms Sarangi’s move is giving sleepless nights to officials at the Orissa State Central Coopera-tive Bank, the apex body of the three-tier cooperative banking system in the state. Many of them fear that the Bargarh Bank may ended up with a huge loss. Given the integrity of the PACS employees and the expertise in judging the FAQ standard, the Bank may end up being saddled with a huge stock of paddy which will not be accepted by FCI.

Orissa has set a target of 15 lakh tonne of rice for this procu-rement season taking into account the agriculture departm-ent’s projection that total surplus would be 20.26 lakh tonne. However, by now only 8.33 lakh tonne has been procured out of the 10 lakh that was distributed among all the 30 districts, barring Khandhamal. In the last procurement season, total collections stood at 9.20 lakh tonne against the target of 10 lakh tonne. However, the legal battle that the state government is fighting may give a new direction to the Centre’s paddy procurement policy and address the issue of dece-ntralisation of procurement.