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In a move probably aimed at reducing handling costs at the initial stage of the rice procurement process, the Centre has asked Punjab to explore the possibility of auctioning paddy in some districts where there is a surplus.
Earlier this month, the Food Corporation of India (FCI) wrote to the Director, Punjab Food, Civil Supplies and Consumer Affairs Department, to explore the option of auctioning the paddy in surplus districts such as Ferozepur, Gurdaspur and Hoshiarpur at the end of the procurement season.
“The marketability of rice, surplus quantity, storage constraints and overall cost-benefit should drive objective decision making. It is clarified that neither farmers nor millers will suffer any loss from such an initiative,” the FCI said in the letter.
Food Secretary’s visit
FCI’s letter follows the visit of Union Secretary for Food and Public Distribution Sudhanshu Pandey to Punjab and Haryana last month to review the procurement process
The paddy procurement is still under process and total paddy purchased by the Government agencies in Punjab for the Kharif Marketing Season 2021-22 stood at 165.58 lakh tonnes as on November 11. Punjab State agencies have procured 163.81 lakh tonnes, while FCI had procured 1.37 lakh tonnes. In Haryana, the paddy procured by State agencies and FCI stood at 53.38 lakh tonnes.
Overall, paddy procured across the country by various state agencies and FCI stood at 231.36 lakh tonnes as on November 11 for the 2021-22 kharif marketing season.
Trade sources see the latest move by the Centre asking Punjab to explore auctioning of surplus paddy as a step towards reducing the handling and storage costs of the paddy/rice in the initial stage of the procurement process. The Government buys the paddy at MSP first from the farmers and then auctions it at the mill level so that both farmers and the mills don’t suffer.
‘Will cut subsidy burden’
“It is a good move,” said B V Krishna Rao, President, The Rice Exporters Association commenting on the Government’s proposed move to auction surplus paddy in Punjab. Such a move reduces the handling and storage costs for the Government, hence reducing the subsidy burden, Rao said.
Also, it will make more rice available in the market. The proposed move is WTO compliant and will help exporters find more paddy for export and help retain the global position, Rao said. India has emerged as the largest exporter of rice in recent years.
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