Kharif paddy procurement starts amid concerns over stocks | The Financial Express

Kharif paddy procurement starts amid concerns over stocks

This year’s rice procurement drive would be closely monitored given the anticipated decline in production in 2022-23 season because deficient monsoon rainfall in eastern regions is seen to adversely impact the purchases for the central pool stocks.

Kharif paddy procurement starts amid concerns over stocks
Although it is still early days, paddy arrivals in mandis especially in Punjab and Haryana, major contributors to the central pool stocks, are expected to peak by the middle of this month. (IE)

Paddy procurement by the Food Corporation of India (FCI) and state government agencies for the current kharif season — 2022-23- has commenced in key states including Punjab, Haryana and Tamil Nadu. The total purchase of around 0.5 million tonne (mt) of paddy so far has been marginally higher than in the previous year.

Although it is still early days, paddy arrivals in mandis especially in Punjab and Haryana, major contributors to the central pool stocks, are expected to peak by the middle of this month.

This year’s rice procurement drive would be closely monitored given the anticipated decline in production in 2022-23 season because deficient monsoon rainfall in eastern regions is seen to adversely impact the purchases for the central pool stocks.

Since the paddy procurement commenced on October 1st, 20,000 tonne in Punjab and 0.17 mt in Haryana have been purchased from farmers. The target is to purchase 18.6 mt (12.5 mt rice) and 5.5 mt (3.7 mt rice) of paddy from Punjab and Haryana respectively this year at the minkum support price, which would boost the government’s stocks.

“We expect paddy arrivals to peak around October 15, as farmers are in the process of completing harvesting of paddy,” Manish Pajni, an official with Punjab’s food and civil supplies department at Khanna mandi, country’s biggest grain market, told FE.

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Paddy arrivals in mandis in Punjab, Haryana, Uttar Pradesh and Tamil Nadu are during October-November period while arrivals of grain take place during December –January, in Andhra Pradesh, Telangana, Odisha, Chhattisgarh and other key producing states. Paddy to rice conversion ratio is 67%.

Despite an estimated 6 mt of decline in rice production in 2022-23 crop year (July-June) from a record 130 mt in 2021-22 crop year, the government had set a marginally higher target of 51.8 million tonne (mt) of kharif rice procurement for 2022-23 season.

Kharif rice procurement was 50.9 mt in 2021-22 season. Kharif procurement contributes around 86% of the total rice purchased from the farmers by FCI and state agencies under the minimum support price (MSP) operation.

In the 2021-22 procurement season, FCI have procured more than 59.2 mt of rice.

In the previous year, rice procurement was a record 60.2 mt. Rice production had hit a record 130.29 mt in the 2021-22 crop year, having recorded an increase of close to 5% from a year before.

At the beginning of this month, the rice stock held with FCI was around 22 mt. This stock excludes 9.5 mt of rice yet to be received from millers. Current rice stocks far exceed buffer stock norms of 10.2 mt.

States including Punjab, Haryana, Chhattisgarh, Odisha, Telangana and Andhra Pradesh contribute significantly to the central rice pool which is used for supplying grain to beneficiaries under the National Food Security Act and free ratio scheme. The rice procured from grain surplus states is also used for keeping a buffer stock with FCI.

The government had earlier increased the MSP of the common variety of paddy by more than 5% to Rs 2,040 a quintal for 2022-23 season from Rs 1,940 per quintal in the previous season.

After paddy is procured from the farmers by FCI and state agencies, it is handed over to millers for conversion into rice.

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