Uttar Pradesh will raise Rs 3,000 crore as bank loans for paddy procurement on minimum support price (MSP), announcing the decision as farmers protest legislations Parliament passed in September to reform the agriculture sector.
The short-term working capital loan would be sourced from state-owned lenders offering the minimum interest rate to UP State Food and Essential Commodities Corporation Limited (SFC).
The SFC would then allocate funds to the state food and civil supplies department for effecting the field paddy procurement. The proposal to raise Rs 3,000 crore in short-term loan/cash credit limit to facilitate seamless procurement of paddy from the farmers was recently cleared by the UP cabinet.
The MSP for A-grade and common variety paddy this kharif season has been fixed at Rs 1,888 per quintal and Rs 1,868 per quintal. The government would act as a guarantor for the Rs 3,000 crore credit window of the SFC, while the interest payment of the loan, until it is finally repaid by the SFC, would also be incurred by the state.
A total of 4,000 procurement centres would be set up by the different procurement agencies in the state, including some 100 operated by the Food Corporation of India (FCI).
The procurement season in the Western UP districts would be effective from October 1 to January 31, 2021, while in the Eastern UP pockets, the paddy procurement would start on October 15 and would continue till February 28, 2021.
Manish Chauhan, UP food and civil supplies commissioner, said the process of registering rice millers, for custom milling of paddy, was going on and so far 1,905 mills had been accounted for, of which 1,736 had been geo-tagged. The food storage depots are also been geo-tagged.
Meanwhile, nearly 160,000 farmers had already registered themselves with the food department portal for selling their paddy crop. According to the government estimates, the state has logged paddy output of more than 26.4 MT in the 2020-21 kharif marketing season. The government is expecting rice production of about 17.7 MT this year.
Last year, the paddy production in UP stood at 24.4 MT, while the government had procured 5.657 MT of paddy from farmers.