In a concerning development for India’s agricultural sector, the Food Corporation of India (FCI) has reported a 14% decrease in rice procurement for the national buffer stocks, a stark contrast to last year’s figures. The current procurement volume stands at 29.93 million tonnes (mt), a notable decline from the 34.78 million tonnes (mt) recorded during the same period last year. This downturn, observed in the crucial initial months of the season starting October 1, contrasts with the 11% increase in procurement during the October-December 2022 period compared to the 2021-22 level. Industry experts are now expressing apprehension that this year’s procurement could significantly miss the set target.
Disparate Regional Trends in Procurement
A closer look at regional data reveals mixed trends. In Punjab, procurement marginally increased to 12.50mlt from the previous year’s 12.19 mt, while Haryana observed a slight decline to 3.94 mt from 3.95 mt. Procurement in these states concluded in December, whereas in western Uttar Pradesh, it is expected to extend until the end of January.
An industry expert commented, “The initial three months are generally indicative of the procurement trend. The current scenario, characterized by lesser procurement and higher market rice prices, offers farmers diverse selling avenues.”
Chhattisgarh’s Potential Role in Bolstering Procurement
A potential game-changer for procurement statistics could be the central government’s decision to permit Chhattisgarh’s new government to pay paddy farmers $0,37 per kg, surpassing the $0,26 minimum support price (MSP). However, as of December 31, Chhattisgarh’s procurement figures were 25% lower than the previous year, standing at 3.85 mt. Telangana also saw a 28% decrease in procurement.
National Procurement Targets: A Balancing Act
The government has set an ambitious target to procure 52.12 mt of rice from the kharif crop for the 2023-24 season (October-September). However, the Agriculture Ministry’s projection of a 4% decline in kharif rice production compounds the challenges in meeting this target. While the shortfall in procurement may not critically impact the government’s annual requirement of 400 lt for its schemes, it does pose limitations on distributing additional grain beyond the food security law mandates. This aspect is particularly significant considering the government’s distribution of additional rice and wheat during the Covid lockdown, equivalent to the NFSA allotments, for two years.
Elections and Regional Procurement Dynamics
The FCI has partially attributed the procurement shortfall to elections in key states like Chhattisgarh and Telangana. While Chhattisgarh shows signs of recovery, Telangana’s gap has widened. In Odisha, the procurement deficit has decreased from 39% to 26%. Conversely, Andhra Pradesh continues to grapple with a procurement shortfall exceeding 56%. The political dynamics, particularly the promises made during Chhattisgarh’s election campaign, have significantly influenced the procurement patterns in these states.
Uttar Pradesh, Tamil Nadu, and West Bengal: A Mixed Bag
In Uttar Pradesh, a 15% reduction in procurement was recorded, with significant regional variations. Tamil Nadu’s procurement remained relatively stable but was 36% less than the previous year. In contrast, West Bengal reported a substantial increase in procurement due to an early harvest, marking a positive development amidst the overall challenging scenario.
This varied landscape of rice procurement across India highlights the complex interplay of regional dynamics, market forces, and political influences, underscoring the challenges in meeting national agricultural targets.
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