CENTRE TO PROCURE RECORD QUANTITY OF PADDY THIS YEAR

The Union government is on course to buying a record quantity of paddy this year, with a sharply higher purchase in Punjab to blunt a politically challenging farmers’ agitation against a set of laws enacted to liberalise the farm sector, projections by the food ministry show.

Paddy is the main summer staple that drives the incomes of cultivators in states such as Punjab. The food ministry’s official projections show the government’s total procurement of summer paddy (2020-21) will likely touch 74.2 million tonnes, up from of 62.7 million tonnes procured during 2019-20, an increase of 18%.

The food ministry has expanded its procurement operations, which refers to the government’s buying of farm produce at assured prices, for summer-sown crops to cover an estimated 10.5 million paddy growers, against last year’s 10.2 million.

The government has also raised by 27% the number of paddy-purchase centres, which now stand at 39,122, up from 30,709 last year, official figures show.

To be sure, production of kharif or summer crops this year is likely to be a record 144.5 million tonne, slightly higher than the 143.4 million tonne produced during the kharif season of 2019-20, according to an official forecast.

According to the food ministry’s data, the government had bought, until November 4, 22.4 million tonne of paddy, which is

already 20.18% higher than the 18.6 million tonnes procured during the corresponding period last year. Of the total purchases, Punjab’s share so far has been the highest at 15.8 million tonne, which is 70.52% of the total quantity procured.

Farmers in Punjab are protesting reforms that allow agribusiness to freely trade farm produce, permit private traders to stockpile essential commodities for future sales and lay down new rules for contract farming. A crucial change is that traders, agribusinesses and supermarkets can buy produce from any market, rather than only in notified markets where they are licenced to operate. The government enacted three laws on September 24 to usher in these changes.

The laws have angered farmers, particularly in Punjab, who fear the reforms could pave the way for the dismantling of the minimum support price system, which offers growers an assured price, leave them vulnerable to powerful agribusinesses and in an even weaker negotiating position. PM Modi has said, on several occasions, that the three laws have no bearing on the current system of procurement at assured prices, which will continue. To placate farmers, the government’s agencies have launched large buying operations in Punjab, Haryana, UP, Uttarakhand, Tamil Nadu, Chandigarh, J&K, Kerala, Gujarat and Andhra Pradesh.

Year-on-year comparisons show higher purchases. For instance, the government, until November 1, purchased 12.9 million tonne paddy in Punjab, which is 37% higher than the quantity procured during the corresponding period last year (9.4 million tonne).

In Uttar Pradesh, paddy procurement until November 1 was higher by 413% at 390,920 tonnes, against 76,254 tonnes during the same period last year. The food ministry has also started procuring rice for the first time from Uttarakhand and so far, 405,174 tonnes have been purchased.

Till October 4, the paddy purchases have benefited nearly 1.8 million farmers, who have been paid minimum support price (MSP) of ₹42,422.49 crore since procurement of crops began on September 27.

“The higher procurement will likely overshoot the government’s storage capacity and make managing stocks difficult unless the government offloads more as food aid to the poor,” said analyst Abhishek Agrawal of Comtrade, a commodities trading firm.

From April to November 2020, the government has made additional offering of free food under the Pradhan Mantri Garib Kalyan Yojana (PMGKY), launched due to Covid-19. This has freed up storage capacities of bulging state-held granaries and made way for higher paddy procurement. The total allocation under the PMGKY is 32.1 million tonnes. This included 21.4 million tonnes of rice and 10.6 million tonnes of wheat. As on September 1, 2020, total federally held food stocks stood at 77.3 million tonnes, up from 71.2 million tonnes on the same date last year. The Centre has fixed an MSP for the so-called common variety paddy at ₹1,868 per quintal and for the A grade variety at ₹1,888 per quintal for the current year. The government had initially set a total rice procurement target of 49.5 million tonnes for the entire country for the 2020-21 kharif season.