The Hindu Business Line : Bonus announcement: Delay hits paddy buying

New Delhi, Oct. 8 The delay in announcement of a bonus for paddy, over and above the minimum support price (MSP), is impacting procurement for the Central pool in the just-commenced 2007-08 kharif marketing season (October-September).

Cumulative buy

The Food Corporation of India (FCI) and State agencies have, as on Monday, managed to cumulatively buy only 17.50 lakh tonnes (lt) of rice, against 22.79 lt procured during the corresponding period of the 2006-07 season. Procurement is lagging behind both in Punjab (14.13 lt versus 18.38 lt) as well as Haryana (3.33 lt versus 4.39 lt).

Market arrivals, too, have been lower so far, with mandis in Punjab receiving only 29.72 lt of paddy, compared with last year’s cumulative quantity of 34.15 lt. The corresponding paddy arrivals in Haryana mandis stood at 7.52 lt and 8.49 lt, respectively (paddy contains roughly 67 per cent rice). Significantly, out of the total paddy arrivals till now, private traders and millers have bought 29.03 per cent in Punjab and 34.18 per cent in Haryana, as against their corresponding last season shares of 19.65 per cent and 22.83 per cent, respectively.

Farmers are apparently delaying bringing their crop into the market because they are awaiting the announcement of the bonus by the Centre. Those who cannot hold on are preferring to sell to private millers and dealers, as they are offering marginally more than the MSP (fixed at Rs 675 a quintal for Grade ‘A’ paddy and Rs 645 a quintal for common varieties).

The Centre is expected to declare a bonus of Rs 40 a quintal, with the decision slated at the next meeting of the Union Cabinet on Thursday. The drop in mandi arrivals is also being attributed to late transplanting this time.

Late transplantation

“Normally, in Punjab transplanting starts towards mid-May, whereas this year it took off only from early June. The main reason for this was the State Government not making available electricity for agricultural operations before June 10,” said Mr Raj Sood, a leading commission agent from Punjab’s Khanna mandi. The Government has been keen to discourage peak-summer plantings in view of it aggravating the already grave water-table situation in the State.

There has also been a decline in paddy acreage in Punjab, from 26.21 lakh hectares (lh) to 25.75 lh, and in Haryana, from 10.41 lh to 10.20 lh.

Shift in area

“Some area has shifted to maize and cotton. But I believe this will be offset by yields averaging 28-29 quintals an acre, against last year’s 26-27 quintals. So, on the whole, production will remain more or less the same”, said Mr Anil Mittal, CMD of the Delhi-based KRBL Ltd.

Total rice procurement for the entire 2006-07 season amounted to 250.75 lt, which was below the record 276.56 lt of 2005-06. If current trends holds, the 2007-08 season may end up with even lower procurement.

Related Stories:
Centre plans Rs 40 a quintal bonus on paddy

More Stories on : Rice | Bonus Announcements

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page