Reversal of levy rice procurement policy irks AP millers

The kharif paddy crop is being harvested in the two Godavari districts in Andhra Pradesh, which contribute the bulk of levy rice to the FCI, and the arrivals in the market will usually gather momentum from the first week of December and touch the peak by mid-January. However, this crop year a shadow has fallen across the scene as the Union Government has reversed the procurement policy.

Hitherto, till October this year, the FCI was procuring levy in the ratio of 75:25, with the millers milling and giving 75 per cent of the paddy they have bought from the farmers to the FCI as levy and selling the rest in the open market, either in the domestic market or for export purposes to other countries. However, the ratio has now been reversed and the FCI will now take only 25 per cent as levy and the millers have to sell the rest in the open market in accordance with the new policy. The millers are not ready for the sudden policy reversal and have appealed to the State Government and the Union Government to change the ratio to at least 50:50.

Explaining the position of the millers, East Godavari Rice Millers’ Association President A Ramakrishna Reddy said, “We are not questioning the policy of the Union Government but the decision has been taken without taking into account certain market realities. The millers in the two Godavari districts have always bought paddy from the farmers at the MSP or even at a slightly higher price. It was possible because of the assured 75 per cent levy given to the FCI. Millers could buy paddy briskly from farmers but it would not be possible now, as the levy is only 25. It is not easy for the millers to find a ready market for the rest of 75 per cent and most of the millers do not have the holding capacity. Even a big miller will be put to great hardship,” he said.

He said it should also be borne in mind that some of the varieties grown in the Godavari districts such as Swarna are not consumed locally but given to the FCI as levy or sold in other States or countries. Therefore, it was not easy for the millers to find market for these varieties in a hurry.

AP Rice Millers’ Association President G Venkateswara Rao said the Government should offer some relief to the millers at least in the implementation of the new policy and the millers should be allowed to sell to the FCI the fixed levy quota immediately and then buy the rest from the farmers at the MSP. Otherwise, the stocks would be stuck with the farmers.