Paddy procurement at MSP up 23%: Govt data

The Union government bought a record 47.9 million tonne of kharif (monsoon crops) paddy in its ongoing procurement operations, 23% more than it did last year, according to data released by the government.

Nearly 6 million farmers have been paid minimum support prices worth Rs 9000 crore for these purchases, the data show.

The higher procurement comes at a time when farm unions protesting on Delhi’s borders have demanded making federally fixed assured prices or MSP a legal right.

Paddy is the main summer staple that drives the incomes of cultivators in states, such as Punjab. The food ministry’s official projections show the government’s total procurement for summer paddy (2020-21) will likely touch 74.2 million tonnes, up from the total quantity of 62.7 million procured during 2019-20, an increase of 18%. Punjab’s share in total paddy procurement stands at 42%.

The food ministry has expanded its procurement operations, which refers to the government’s buying of farm produce at assured prices, for summer-sown crops to cover an estimated 10.5 million paddy growers, against last year’s 10.2 million.

The government has also raised by 27% the number of paddy-purchase centres, which now stand at 39,122, up from 30,709 last year, official figures show.

Farmers, mostly from Punjab and Haryana are protesting reforms that allow agribusiness to freely trade farm produce, permit private traders to stockpile essential commodities for future sales and lay down new rules for contract farming. A crucial change is that traders, agribusinesses and supermarkets can buy produce from any market, rather than only in notified markets where they are licenced to operate. The government enacted three laws on Sept 24 to usher in these changes.

The laws have angered farmers, particularly in Punjab, who fear the reforms could pave the way for the dismantling of the minimum support price (MSP) system, which offers growers an assured price, leave them vulnerable to powerful agribusinesses and in an even weaker negotiating position than before.

To placate farmers, the government’s food buying agencies have launched large buying operations in Punjab, Haryana, Uttar Pradesh, Uttarakhand, Tamil Nadu, Chandigarh, Jammu & Kashmir, Kerala, Gujarat, Assam and Andhra Pradesh.

The Centre has fixed an MSP for the so-called common variety paddy at Rs 1,868 per quintal and for the A grade variety at Rs 1,888 per quintal for the current year. The government had initially set a total rice procurement target of 49.5 million tonnes for the entire country for the 2020-21 kharif season.

In addition, the government has also accelerated purchase of other crops.

“Up to 30.12.2020, the Government through its Nodal Agencies has procured 251633.79 MT of Moong, Urad, Groundnut Pods and Soyabean having MSP value of Rs.1346.76 Crores benefitting 1,35,813 farmers in Tamil Nadu, Maharashtra, Gujarat, Haryana and Rajasthan,” a government note said.

To be sure, production of kharif or summer crops this year is likely to be a record 144.5 million tonne, slightly higher than the 143.4 million tonne produced during the kharif season of 2019-20, according to an official forecast.