Rice procurement estimated to rise 14%

Govt sets a target of 40 million tonnes for the 2012-13 kharif season

The government has set a target of 40 million tonnes (mt) rice procurement for the 2012-13 kharif season, five mt or 14 per cent higher than the previous year’s 35 mt.

The procurement for the central pool by the Food Corporation of India (FCI) starts from October 1 and it will be assisted by the National Agricultural Cooperative Marketing Federation of India Ltd (Nafed).

This target is against the government’s estimate of lower foodgrain production for 2012-13.

According to officials, the record procurement will be possible since it will be done at a higher minimum support price (MSP). The MSP for the common grade variety and ‘A’ grade variety of paddy have been increased to Rs 1,250 a quintal and Rs 1,280 a quintal from Rs 1,080 and Rs 1,110 a quintal last year, respectively. According to the first advance estimate of the ministry of agriculture, rice output this year is estimated to fall to 85.56 mt from a record 91.53 mt last year.

Officials, however, added market prices might fall below the MSP and in that case, subsidy issue needs will be cleared by the central government to maintain picking up of stock at MSP. For many commodities, the ministry of agriculture had raised MSP quite sharply, by 30-40 per cent.

The first tranche of procurement will be from northern states like Punjab and Haryana. Nafed will start procurement for the eastern states like Bihar, Odisha, West Bengal and Uttar Pradesh under the decentralised procurement system (DPS) in late October and November. “Arrivals have started in the northern states and the crop is yet to arrive in the eastern states,” officials said.

Under DPS, every state nominates an agency to procure on its behalf. But the state procurement is part of the government’s Public Distribution System (PDS) and the central pool. Regional offices of Nafed and FCI form part of the state agencies involved in the food procurement, they added. The advantage of DPS is that for PDS, the foodgrain procured from the state can be used only in that state. Earlier, food procurement used to happen only for the northern states and the stock used to travel from northern states to other states for PDS, leading to wastage in transit. Therefore, DPS was initiated, when other states joined in.

Meanwhile, Nafed has already started procurement of oilseed and pulses (urad variety) from Maharastra. FCI, with the help of the public-private-partnership mode, has added five-six mt capacity of storage this year.

FCI, the central government’s nodal procurement agency, along with other government agencies, procured 34 mt rice in the 2010-11 kharif marketing season.

The biggest contributors to the central pool were Andhra Pradesh (9.6 mt) followed by Punjab (8.6 mt), Chhattisgarh (3.7 mt), Uttar Pradesh (2.5 mt), Orissa (2.4 mt) and Haryana (1.6 mt). Tamil Nadu and West Bengal contributed 1.5 mt and 1.3 mt, respectively.