Cut grain procurement from states with high mandi taxes: CACP

Sandip Das

The Commission for Agricultural Costs and Prices has said the procurement of grains should be reduced from the states who impose high mandi fee and other levies as this restricts inter-state trade and makes markets inefficient.

The Commission for Agricultural Costs and Prices (CACP) also urged the government to take appropriate policy measures to promote rice cultivation in suitable areas and reduce the area under rice in Haryana, Punjab and western Uttar Pradesh.

High taxes restrict inter-state trade and makes markets inefficient, the Commission for Agricultural Costs and Prices (CACP) said in its report on price policy for kharif crops (2023-24). “Moreover, it has not led to any discernible improvement in the mandi infrastructure,” the commission said. In kharif marketing season (2022-23), the total fee and incidentals charged on rice procurement ranged from Rs 20.4/quintal in Karnataka to Rs 167.78/quintal in Punjab.

There is an urgent need to shift rice cultivation from Haryana, Punjab and western Uttar Pradesh to east and south-west coast regions to curb over-exploitation of scarce water resources, the CACP stressed.

It said Odisha, West Bengal, Chhattisgarh, Jharkhand, north-eastern states and the south-west coast are more suitable for rice cultivation. “However, in most of these regions, the area under rice is relatively low compared with north-western plains,” the CACP said.

The CACP has also stated that assured procurement of rice and wheat by the Food Corporation of India (FCI) and state agencies has led to very high share of paddy and wheat in the total cropped area in Punjab and Haryana.

Punjab and Haryana have contributed 12.2 million tonne (MT) and Haryana (3.9 MT) of rice in the total purchase of 53.2 MT the government agencies in the 2022-23 marketing year (October-September). Punjab and Haryana have a share of 46% (12.1 MT) and 24% (6.3 MT), respectively, in the total wheat procurement of 26.19 MT in the current season (2023-24) so far.

“”Though the procurement of rice and number of beneficiary farmers are increasing, the uneven distribution of procurement as well as beneficiaries raises concerns of efficiency and social equity,” the commission has observed.

“The share of pulses, oilseeds, maize and bajra in Punjab has continuously declined during 1980-81 to 2021-22 while the share of paddy has increased from 17.5% to 40.2% during the same period,” according to the CACP.

The commission has noted that the share of maize has declined from 5.6% to 1.3%, bajra from 1% to 0.5%, pulses from 5% to 0.4% and oilseeds from 3.7% to 0.5% during the same periods.

CACP report has stated that paddy cultivation in Punjab and Haryana has resulted in over-exploitation of scarce water resources with the share of blocks in over-exploited category has increased from about 75% in 2004 to 76% in 2022 in Punjab and from 49% in 2004 to 62% in Haryana in 2022.

This article has been republished from The Financial Express