Paddy procurement up amid farmers’ agitation

The Union government has procured 28.6 million tonnes of paddy, 18.6% higher than the quantity in the corresponding period last year, with Punjab’s share being the highest at nearly 70%, according to the food ministry’s data until November 17.

The government has paid a minimum support price (MSP) value of Rs 54,147 crore so far to nearly 2.7 million farmers in key rice-growing states, such as Punjab, Haryana, Uttar Pradesh, Telangana, Uttarakhand, Tamil Nadu, Kerala and Andhra Pradesh, the data showed.

Punjab alone has contributed over 19.6 million tonnes, which is 69.7% of the total procurement. Last year, till November 17, the government had procured 24.1 million tonnes of paddy.

To be sure, production of kharif or summer crops this year is likely to be a record 144.5 million tonnes, marginally higher than the 143.4 million tonnes produced during the kharif season of 2019-20, according to an official forecast. Higher output, buoyed by a robust monsoon, is one of the reasons behind higher procurement this year.

The Union government is on course to buying a record quantity of paddy this year also to blunt a politically challenging farmers’ agitation against a set of laws enacted to liberalise the farm sector. Farmers protesting the laws fear the reforms would erode their bargaining power and lead to a collapse of the procurement system, which refers to the government’s buying of farm produce at federally fixed assured prices.

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The food ministry’s official projections show the government’s total procurement for summer paddy (2020-21) will likely touch 74.2 million tonnes, up from the total quantity of 62.7 million procured during 2019-20, an increase of 18%.

The food ministry has expanded its procurement operations 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.

Higher procurement may make managing stocks difficult unless the government offloads more as food grant to the poor, according to 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.

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