The good start comes after a record 28.4 million tonne paddy procurement during the 2007-08 season, a figure that exceeded the target of 27.6 million tonne. The total grain (both rice and wheat) procurement during 2007-08 season, which ended in September 2008, is 50.1 million tonne.
This bright start would boost the comfort level of the UPA government and ease pressure on it to boost the floor price for paddy to bring it on a par with wheat at Rs 1,000 per quintal. The government is yet to decide on the hike in the minimum support price for paddy.
The comfortable food stocks would definitely help the government in containment, which has started to cool off mainly due to stability in food items like wheat and rice. Rice is 2.4% in the Whole Sale Price Index.
According to a ministry of agriculture statement, out of total paddy procurement, Punjab has contributed 2.3 million tonne, while Haryana has contributed 8 lakh tonne. Other states where procurement has just commenced include Delhi, Rajasthan and Chattisgarh.
The procurement in Haryana, which began from September 21, earlier than the normal schedule of October 1, is higher this year, while it is over 1 lakh tonne less in Punjab, the statement said.
However, the government is in discussions to give a 'minimum bonus' despite the good procurement, mainly due to more than 2.4 hectare of crop loss because of the recent floods in Bihar, Orissa and other parts of the country.
At Rs 850 and Rs 880 per quintal, respectively, for common and grade A varieties, the MSP for paddy currently marked up a 37% rise over the weighted average costs estimated for the kharif 2008-09 season. Even a higher support price would boost the government's procurement drive. Official sources said that once a sufficient buffer is built, the government would ease the export restrictions on varieties of rice.
For 2008-09, the total allocation of rice under the targeted PDS was about 23.5 million tonne and for other welfare programmes about 3.7 million tonne, bringing the total requirement to 27.2 million tonne. Several states had asked for a hike in the allocation of rice for above poverty line (APL) consumers and some states may seek restoration of rice allocation substituted by wheat earlier.