Kharif paddy procurement stood at 17 million tonne (mt) on Monday, up 12% on year. According to a food ministry official, 0.83 million farmers have received Rs 28,000 crore as minimum support price (MSP) one month into the purchase season.

Officials said that surplus rains, especially by the end of September and the first week of October, prior to harvesting, have not impacted mandi arrivals. Punjab, Haryana, Tamil Nadu, Uttar Pradesh and Uttarakhand have contributed the most to procurement.

In Punjab, the biggest contributor to the central pool, the agencies including FCI have purchased 10.7 mt of paddy so far, which is 8% more than during the same period in the previous year. Officials said that procurement would be at its peak in the next couple of days, as harvesting was delayed by 10 days because of unseasonal rains last month.

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In Haryana, agencies have procured 5.2 mt of grains under MSP operations, which was 8% more than a year ago.

In Tamil Nadu, paddy purchase so far has been 0.8 mt, while Uttarakhand and Uttar Pradesh have contributed 0.2 mt and 33,668 tonne, respectively. Purchase operations in key rice growing states — Odisha, Chhattisgarh, Andhra Pradesh and Telangana — will commence next month.

The government is aiming to procure 90 mt of paddy in the entire marketing season (2022-23).

Paddy-to-rice conversion ratio is 67%. After paddy is procured from the farmers by the FCI and state agencies, it is handed over to millers for conversion into rice.

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

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

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

The government is aiming to boost rice procurement because of a decline in stocks because of the free ration scheme being extended for a seventh time till the end of this year.

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In the previous year, rice procurement was at a record 60.2 mt. Rice production had hit a record 130.29 mt in the 2021-22 crop year.

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 ration scheme. The rice procured from grain-surplus states is also used for keeping a buffer stock with the 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 the 2022-23 season, from Rs 1,940 per quintal in the previous season.