After wheat, now rice procurement too drops

FCI this year purchased around 34.1 MT of rice from farmers, while last year it had purchased around 35 MT

After a almost 32% drop in wheat procurement, government’s rice purchases in 2012-13 too have fallen by around 3% primarily because of low procurement in main rice producing states of Andhra Pradesh and Uttar Pradesh.

However, experts said this is unlikely to have any impact on long-term prospects as stocks in state-run including the ambitious National Food Security Bill warehouses.

According to government data, Food Corporation of India (FCI) this year purchased around 34.1 million tonnes of rice from farmers, while last year it had purchased around 35 million tonnes.

The drop in procurement has been in Andhra Pradesh, where purchases fell from 9.6 million tonnes to 6.45 million tonnes, while in Uttar Pradesh it fell from 3.35 million tonnes to 2.28 million tonnes. “Procurement has dropped because of increased purchases by private traders and also low output,” a senior government official said.

“The drop in procurement of paddy is good for the country as government has ample stocks and this is not reflective of any long-term trend,” eminent agriculture economist and chairman of Commission for Agriculture Costs and Prices (CACP), Ashok Gulati told Business Standard.

As per FCI data, rice stocks in central pool was estimated to be around 21 million tonnes, three times more than the required quantity of 7 million tonnes, while wheat stocks was estimated to 38.3 million tonnes, as against the required quantity of 14 million tonnes.

In wheat, this year procurement fell by almost 34.1% to around 26 million tonnes from 38.1 million tonnes last year largely because of increased purchases by private traders and fall in overall wheat production.

Meanwhile, on rice, the data showed that procurement in Punjab, Haryana and Chattisgarh remained higher than the previous year.

The government's rice purchase from Punjab rose to 8.55 million tonnes in 2012-13 from 7.73 million tonnes in the previous year. Rice buys from Chhattisgarh grew to 4.8 million tonnes from 4.11 million tonnes, while procurement from Haryana increased to 2.5 million tonnes from 1.6 million tonnes in the review period, as per the FCI data.

FCI and state procurement agencies procured common variety paddy at Rs 1250 per quintal and 'A' grade variety paddy at Rs 1280 last year. Procured paddy was later milled into rice. The country had harvested 104.4 million tonnes of rice in the 2012-13 marketing year.