Despite deficient monsoon last year, rice procurement by agencies such as Food Corporation of India (FCI) and state government-owned bodies in the kharif marketing season (2015-16) has witnessed a sharp annual increase of 20% so far, and is poised to exceed the yearly target of 30 million tonne.
Sources told FE that government agencies have purchased paddy equivalent of more than 29 million tonne (MT) of rice between October 1 2015, when the procurement season had begun, and Sunday, compared with 24.2 MT in the year-ago period. Higher procurement of rice could be attributed to fall in prices of common variety of rice in various mandis across the country and states such as Uttar Pradesh and West Bengal stepping up their procurement systems, they added.
According to the latest data, agencies have so far purchased paddy equivalent of 9.3 MT of rice from farmers in Punjab, surpassing the target of 8.8 MT for the 2015–16 marketing season. In Punjab, which contributes the highest volume of rice and wheat to the central pool, 7.7 MT of rice was purchased during the same period last year.
In Haryana, state government agencies have purchased 2.8 MT of rice equivalent of paddy, surpassing the target of 2.3 MT set for the year. Other states which have commenced rice procurement include Uttar Pradesh (2.9 MT), Andhra Pradesh (2.8 MT) and Kerala (1.8 lakh tonne). Even in Chhattisgarh, where the state government carries out purchase of paddy from farmers, state agencies have purchased 3.4 MT of rice. In Odisha, more than 2.2 MT has been purchased from farmers.
The government agencies buy paddy from farmers; then the grain is given to millers for conversion into rice. The Cabinet Committee on Economic Affairs (CCEA) in June last year increased the minimum support price of the common variety of paddy by Rs 50 to Rs 1,410 per quintal for the 2015-16 kharif season. The hike in MSP was in line with the recommendation of the Commission for Agricultural Costs and Prices.
Finance minister Arun Jaitley announced in the Budget that more states would be encouraged to adopt this system. In the current year, private players have been allowed to purchase paddy from farmers in Jharkhand and Uttar Pradesh where procurement operations of FCI or state agencies are not robust.
Under the current policy, FCI, via state government agencies, procures a major chunk of food grains, mostly rice and wheat, from farmers in Punjab and Haryana. Others states such as Rajasthan, Madhya Pradesh, Chhattisgarh and Odisha carry out purchase of food grains from farmers under a de-centralised scheme.