Paddy procurement might fall lower than target

Food Ministry scales down target to 30 mn tonnes; actual procurement may be about 28 mn tonnes

Paddy procurement from the 2014-15 kharif crop, scheduled to commence from Wednesday, is expected to fall behind the target. The Union food ministry put the target at 30 million tonnes at a meeting this Monday on the issue, a slight revision from the 30.5 mt projected earlier. Sources in various procurement agencies say the actual figure might be 27.5-28 mt.

The reason isn't only due to a deficiency in monsoon rain. In Punjab, about 300,000 hectares has been diverted to basmati from non-basmati this season, owing to higher return for the former. This could bring down the paddy (non-basmati) production by close to a million tonnes, say officials in the agriculture department.

A policy change in Andhra Pradesh, under which the levy rice obligation has been reduced from 75 per cent to 25 per cent, would also make a dent in procurement. Levy rice is the portion, millers are required to provide to the government at the Minimum Support Price.

The millers will now buy less but government agencies will have to gear up operations and there could be an adjustment lag in this, hampering the procurement, said an official in Food Corporation of India (FCI). The official estimated a fall of about one mt in Andhra.

Withdrawal of an earlier bonus on paddy output in Chattisgarh this season might also result in a fall of about one mt. The Union government has been discouraging states from giving a bonus to produce more. FCI had a rice stock of 16.5 mt on September 1. The annual requirement for the Public Distribution System and National Food Security Act is 30 mt.