Spike in yields unlikely to leave Kerala paddy farmers richer

Written by M Sarita Varma | Thiruvananthapuram | Updated: Mar 19 2014, 10:00am hrs
Its a surprisingly big paddy harvest for Kerala farmers this season. But with the procurement price stymied by the state government's price ceiling, it doesnt necessarily mean good news for the farmers.

With Kerala itself needing 7,500 tonne of rice per day and production in the state sub-optimal, the government, through its grocery arm Supplyco, procures the crop at R19 per kg. At open prices, the farmer gets only R15 per kg. In the current season, Supplyco has procured as much as 70,000 tonne. The R19/kg procurement price for paddy is reportedly the highest in the country.

The catch, however, is that Supplyco's ceiling for procurement at R19 per kg is 5.5 tonne per hectare. In Palakkad, which has 83,000 hectares under paddy cultivation, many farmers have reported yields as high as 9.1 tonne per hectare.

This means the farmer may not be able to get the best price offered only for part of his harvest, a senior official at the state agriculture ministry told FE.

The state has about 300,000 rice growers, mostly small and marginal farmers with average land holding below 0.4 hectare. "Theoretically, the state government could amend the norms, but the ongoing general elections would be the perfect excuse. Even otherwise, the farmer has to run from pillar to post to get the procurement dues, says M Suresh Kumar, a farmer.

Although the average paddy yield in Kerala is only 2.7 tonne per hectare, Palakkad, with 12 dams exclusively for irrigating rice fields, logs as much as 5 tonne per hectare. But the current harvest yield, expected to average 9 tonne per hectare, has been unheard of.

What was almost miraculous is that the yield surged when the mercury climbed in November, December and January," says Leelakumari, a senior farm official.

Kuttanad, the other paddy granary of Kerala, is also reporting above-normal yields this season, with some farmers reporting 7.5 tonne per hectare.

"A new variety of paddy, Uma, developed by Kerala Agricultural University (KAU), was used extensively both in Palakkad and Kuttanad. In Palakkad, the shift to machine planting could also have improved the harvest," say the officials.

The bumper harvest in Kerala may also open a window of opportunity for rice mills in the neighbouring Andhra Pradesh, Tamil Nadu and Karnataka. There are less than 130 rice mills in Kerala, and half of them can process only 10 tonne of paddy per week. According to statistics with Kerala Rice Mill Owners' Association, the states paddy-milling capacity is about 3,500 tonne per day, yielding an output of about 2,000 tonne rice. With local rice mills addressing only 20% of the state's requirements, the sudden surge in productivity could also present business opportunities for millers from other parts of the country.