Paddy procurement in Punjab and Haryana down 39 per cent
By Sandip Das
The storage crunch in Punjab and Haryana because of surplus rice stocks in the central pool from the previous year has led to a drop on paddy procurement drive in the current kharif marketing season (2024-25), which commenced two weeks ago.
Till Thursday, the Food Corporation of India and state government agencies have purchased 4 million tonne (MT) of paddy from farmers mostly in Punjab, Haryana and Tamil Nadu which is 39% less than 6.52 MT of paddy purchased in the same period last season (2023-24).
In Punjab, the biggest contributors to the central pool stock, only 1.15 MT of paddy have been purchased so far against 2.48 MT lifted from farmers in the previous year, a drop of 53%.
MSP paddy purchase in Haryana so far is 2.48 MT, a decline of 53% on year. The MSP purchase is against the arrival of 1.36 MT and 2.93 MT in Punjab and Haryana respectively.
In the current season, the target is to purchase 18.5 MT and 5.97 MT of paddy from Punjab and Haryana respectively by the end of November.
However officials told FE that with the food ministry agreeing to create storage facilities following a meeting of Punjab Chief minister Bhagwant Singh Mann with food minister Parhlad Joshi earlier this week the pace of purchase could speed up in the coming weeks.
“The slowdown in procurement is because of storage issues raised by millers as well as arthias or commission agents demanding revision in fee,” an official said.
Agencies are aiming to buy 72.23 MT of paddy (48.51 MT of rice equivalent) in the current kharif season against 46.3 rice purchased from the farmers 2023-24 across key growing states.
Kharif season accounts for around 80% of the total rice purchase during the season.Officials said state agencies have commenced purchase of paddy include Tamil Nadu (3.53 MT), Uttar Pradesh (4628 tonne), Uttarakhand (3967 tonne) and Himachal Pradesh (2272 tonne).
The procurement of grain will commence in Andhra Pradesh, Telangana, Chhattisgarh and Odisha next month and will continue till March next year.
The grain surplus states, after meeting its need under the public distribution system, transfer the surplus stocks to a central pool managed by FCI.
“The paddy arrivals in the northern states are likely to peak over the next four to six weeks and the crop prospects this year have been encouraging because of higher paddy sowing due to surplus monsoon,” an official said.
At the beginning of the month, the paddy procurement drive in Punjab and Haryana was hit as commission agents (arthiyas) went on strike.
The agents had demanded 2.5% commission on crop purchase against the existing system of a fixed remuneration of Rs 46/quintal set in 2019-20 whereas their expenses have increased manifold over these years.
Food ministry sources said that the government is looking into the issue of commission.
According to the agriculture ministry, area under paddy at present stood at 41.45 million hectare, up 2.47% on year.For 2024-25 season, the MSP for common variety of paddy has been hiked by 5% to Rs 2300/quintal from the previous season.
As on Thursday, FCI holds 30.66 MT of rice stocks, excluding 9.13 MT receivable from millers. The rice stock is against the buffer of 10.25 MT for October 1.
FCI annually supplies 38 MT of rice for supply to the beneficiaries under the Pradhan Mantri Garib Kalyan Anna Yojana.The rice procured from grain surplus states is also used for keeping a buffer stock with FCI.
After paddy is procured from the farmers by FCI and state agencies, it is handed over to millers for conversion into rice. Paddy to rice conversion ratio is 67%.
This article has been republished from The Financial Express