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Harish Damodaran

New Delhi, Oct. 25 Is a further Central bonus for paddy growers on the anvil? Well, it would appear so. On October 31, the Finance Minister, Mr P. Chidambaram, the Agriculture Minister, Mr Sharad Pawar and the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia are scheduled to meet and discuss the feasibility of an additional bonus for paddy, over and above the already announced Rs 50 per quintal.

“The issue came up at Thursday’s Cabinet meeting and it was decided to refer the matter to the Finance and Agriculture Ministers. The two, in consultation with the Planning Commission Deputy Chairman, will work out the exact figure, which can then be sent for Cabinet approval,” highly placed sources told Business Line.

The Cabinet Committee on Economic Affairs had, on October 9, cleared an Rs 50 per quintal bonus on top of the minimum support price (MSP) of Rs 645 per quintal on common paddy and Rs 675 on grade ‘A’ varieties for the 2007-08 marketing season (October-September). The effective procurement price payable, thus, came to Rs 695 for common paddy and Rs 725 for grade ‘A’ varieties – an Rs 75 per quintal jump over the previous year.

However, even this unprecedented increase has apparently not passed political muster, with the opposition Bharatiya Janata Party (BJP) as well as the Left and the Telugu Desam Party taking up cudgels of behalf of paddy growers. The issue has found particular resonance in Andhra Pradesh, where non-Congress parties have been holding demonstrations and disrupting rail and road traffic demanding support price parity between paddy and wheat.

Till 2004-05, the MSP for wheat was only Rs 50 per quintal higher than that for grade ‘A’ paddy. But with the acute shortage of public wheat stocks forcing the Centre to liberally raise procurement prices for the former, the effective gap vis-À-vis paddy has now widened to Rs 275. “In a potential election scenario, it would be difficult to justify this difference, particularly in paddy-growing States likes AP and Tamil Nadu, where the Congress and its allies are in power. An additional bonus is, therefore, inevitable”, the sources pointed out.

Meanwhile, the Food Corporation of India (FCI) and State agencies have procured 61.68 lakh tonnes (lt) of rice in the current marketing season till October 25, against the 67.71 lt bought during the corresponding period of the 2006-07 season. If present trends hold, there is a possibility of total purchases for the 2007-08 season falling short of the 250.75 lt of 2006-07 and the record 276.56 lt of 2005-06.

More Stories on : Agricultural Policy | Rice

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