Basmati prices have increased to Rs 3,856 per quintal in Faridkot on Friday, raising expectations that farmers would take to the crop next year too. Last year, the rates hovered at only Rs 2,400 per quintal during the main procurement season and shot up too late.
Perhaps the state government decision to do away with 2% market fees and 2% rural development fund on basmati this year, a rebate of 4% has encouraged farmers to buy more.
"If calculated at 4% at the average rate of the basmati per quintal at Rs 3500, it makes Rs 140 as market fee, which traders are not required to pay," said Kulbir Singh Matta, additional district mandi officer (AMO) Faridkot.
Till Friday, the district had seen the arrival of 5,830 million tonnes of basmati on Friday against the total arrival of 5,014 million tonnes last season.
Matta added: "Paddy arrival will decrease 10-15% and basmati arrival has increased. This has helped diversification. Basmati saves a lot of sub-soil water and input costs on it are lower in comparison to paddy.
International demand behind increase in prices
"Basmati prices have risen this year due to the demand of the produce in international market. Currency depreciation has attracted exporters to the commodity," said Sanjay Mittal, joint secretary, Kotkapura Ahartiya association.
"The area under basmati may increase from 7,000 hectares to 10,000 hectares next year, as most farmers seem happy with the demand," says Sukhwant Singh Sran, Faridkot chief agriculture officer.
However, with only private traders doing the purchasing and wide price variation, some farmers will be cautious.
"I had two acres under Basmati and sold my produce a few days ago at Rs 2,700 per quintal which fetched me around Rs 52,000 an acre However, I will not increase area under the crop as there is a risk of prices touching lows," said Chamkaur Singh Sekhon, a farmer from Bir Sikhan Wala village.
"Even though the income from the crop is not certain, the annual contract for basmati has risen by Rs 5,000 to Rs 45,000 per acre this year," claimed Dharam Singh, a farmer from village Panjgrain Kalan village.
Most farmers have demanded that government must extend the minimum support price mechanism to basmati as well to help them cope up with wide variations in price.
"There are two popular varieties of Basmati among the farmers, PUSA Basmati 1121 (released in 2008) and PUSA Punjab Basmati 1509, released only recently. The PUSA 1121 is fetching the higher price," said Sukhwant Singh Sran.
Another farmer Sukhjinder Singh said that basmati offered them the best option for diversification.