Paddy purchase puts TS in a fix

Stares at a loss of `4,000 crore in kharif

The government is staring at a loss of `4,000 crore in the kharif paddy procurement season with no assurance from the Centre to procure additional stocks from Telangana over.

Nearly 40 lakh tonnes of paddy is still lying in market yards and agricultural fields which the state government will need to procure on its own.

The Centre's Food Corporation of India (FCI) had fixed a target to procure 40 lakh tonnes of paddy from Telangana in rabi. It increased the target to 60 lakh tonnes later after Chief Minister K. Chandrashekar Rao met Union food minister Piyush Goyal twice in September.

The Chief Minister sought increase in procurement target stating that Telangana was expected to receive a record paddy production of nearly 1.3 crore tonnes in kharif due to cultivation of paddy in 62.13 lakh acres. The government already completed the Centre's targeted procurement of 60 lakh tonnes this week.

Agriculture minister S. Niranjan Reddy said another 12-15 lakh tonnes more paddy was awaiting procurement at market yards. Paddy harvesting is yet to be taken up in parts of erstwhile districts of Khammam, Nalgonda and Mahbubnagar districts which is expected up to January 15. Over five lakh acres of paddy cultivation is ready for harvesting. Nearly 40 lakh tonnes of paddy will be available in market yards by January

15 and if the government procures 20 lakh tonnes out of this, it has to spend nearly `4,000 crore.The government already paid

`9,500 crore to farmers to procure 50 lakh tonnes and the payment for another 10 lakh tonnes is pending. The state government borrows money to pay farmers. After FCI procures rice stocks from the state government after milling, it pays the amount to the state government. Since FCI is not willing to take additional stocks, the state government will not get reimbursement after procurement. The government is clueless on what to do with 40 lakh tonnes of stocks after procurement.

The government is considering auctioning paddy stocks in the open market and recover some of the amount from rice millers and traders through auction. The government pays `1,900 per quintal to farmers during procurement but in the auction, it hardly fetches `1,400 to `1,500 per quintal. Moreover, the government incurs additional expenditure towards transportation of stocks from villages to market yards and then to rice mills for milling. It also has to bear the cost of gunny bags, labour charges for packing, weighing, loading and unloading at all points etc and these costs cannot be recovered.