The Hindu Business Line : Rice trade peeved at delay in inclusion of Pusa 1121 as ‘basmati’

“As it is, Pusa 1121 prices have been going down in the global market and the delay in notifying the evolved variety would be a final nail in the coffin of the growers of this variety of rice.”

G. Srinivasan

New Delhi, Aug 31 The All-India Rice Exporters’ Association has said the delay in the announcement of inclusion of evolved basmati rice Pusa 1121 into the new definition of basmati rice as suggested by the Ministry of Agriculture and also endorsed by it is adding to the woes of growers of this rice in the northern India.

Plea

The Association President, Mr Vijay Setia, told Business Line here that the Haryana Rice Millers/Exporters Association has been agitating for the inclusion of Pusa 1121 into the definition of basmati variety for the past one week, with Punjab and Delhi rice millers/exporters also extending their support to the plea.

Even as the crop is mature and ready to be reaped, a large number of farmers have not begun harvesting their crop in the face of continued uncertainty about the inclusion of the Pusa 1121 variety into the basmati definition.

Premium rice varieties including Pusa 1121 has been fetching handsome returns in the last couple of years and due to these remunerative returns, the land rent for an acre has increased from Rs 15,000 to Rs 25,000 and to Rs 30,000 in some areas.

Taxes and Earnings

But a back of an envelop calculation on the basis of an acre production at paddy price of approximately Rs 20,000 a tonne and yield of 2.5 tonnes, the export tax on paddy basis would be around Rs 6,000/tonne plus Rs 1,600 as VAT and Mandi tax, with total tax accounting for Rs 19,000/acre and plus Rs 8,000 for cultivation cost per acre.

Thus from his earnings of Rs 50,000/acre, the farmer would have to fork out Rs 25,000 rent charges, Rs 19,000 as taxes and another Rs 8,000 as cultivation charges, leaving him a loser if the uncertainty over the definition exacts its toll in terms of lost market abroad.

Delay impact

The farmers, who have been growing this variety, after being assured of a high return in the past, are now worried that in the light of the latest cost calculations, they would be ruined if the Government does not notify this premium evolved variety into the new definition.

As it is, Pusa 1121 prices have been going down in the global market and the delay in notifying the evolved variety would be a final nail in the coffin of the growers of this variety of rice, Mr Setia said.

The cess imposed on basmati rice of $200 or Rs 8,000/tonne has cast an additional burden on the farmers since this is going to tell upon the demand for the basmati rice abroad and the growers of high quality basmati rice are baffled as to how to sell their paddy this year, he said.

Identifying varieties

Mr Seita also pleaded for initiating discussions with States as well as with the trade by the Union Government on the third category of rice besides basmati and non-basmati, with a view to identifying the prominent and commercially-viable aromatic varieties, which hold rewarding export potentials.

This would go a long way in augmenting the country’s exports besides beefing up the income of the farmers.

Mr Setia also said that the association has sought for a minimum export price (MEP) on non-basmati to be set based on the prevailing world prices and a cap on exports of maximum of three million tonnes for 2008-09 so that the blanket ban on non-basmati premium varieties would be partially relaxed to the benefit of growers and for earning the foreign exchange.

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