MSP paddy purchases up 4.3% on year
By Sandip Das
Close to five months into procurement drive in 2024-25 season (October-September), the government’s paddy purchase in key producing states have crossed 67.91 million tonne (MT) so far, up 4.3% on year.
In the next couple of months, the government is likely to procure over 73 MT of paddy or 49.56 MT in terms of rice in the current season boosting grain stocks.
In the 2023-24 season, agencies had purchased states had purchased 78.16 MT of paddy or against 52.54 MT rice or purchased from the farmers 2023-24.
The paddy purchase has given a boost to effective rice stock held with a central pool currently exceeding 68.74 MT, four times more than the buffer of 13.58 MT for April 1.
At present, FCI and agencies hold 36.21 MT of rice stocks, excluding 32.53 MT receivable from millers. The rice stock is against the buffer of 13.58 MT for April 1.
FCI annually supplies 38 MT of rice for supply to the beneficiaries under the Pradhan Mantri Garib Kalyan Anna Yojana.
Due to higher grain stock and rise in MSP, the FCI’s economic cost for rice 2024-25 is estimated to increase to Rs 3975/quintal, from Rs 3931/quintal in 2023-24. Officials said the corporation has allocated 2.3 MT of rice for ethanol production and 1.2 MT of grain at a subsidised rate of Rs 2250/quintal.
Officials said paddy lifting operations for rabi harvest from farmers under minimum support price (MSP) for Rs 2300/quintal for 2024-25 season operations by Food Corporation of India (FCI) and state government agencies would continue few states – Andhra Pradesh, Telangana, Odisha and West Bengal will continue for next couple of months.
“The paddy procurement for the season usually gets over by April with only operations in Assam officially would continue till June,” an official said.
This season out of close to 68 MT paddy purchased by agencies from farmers across states include Punjab (17.33 MT), Chhattisgarh (10.44 MT), Odisha (6.34 MT), Haryana (5.37 MT), Telangana (5.39 MT), Uttar Pradesh (5.74 MT) and Madhya Pradesh (4.35 MT).
The purchase by agencies which commenced from October 1 was initially slow in Punjab and Haryana because of lack of storage space. The agencies had to evacuate rice stock from these states so that space could be created.
The agriculture ministry has projected the kharif rice production to reach a record 119.93 MT in 2024-25 crop year (July-June), against 113.26 MT in 2023-24 crop year.
Key contributors to central pool rice stock include – Punjab, Haryana, Madhya Pradesh, Chhattisgarh, Odisha, Andhra Pradesh and Telangana. Kharif season accounts for around 80% of the total rice purchase during this season. Procurement in eastern and southern states would commenced in December.
The rice procured from grain surplus states is also used for keeping a buffer stock with FCI. After paddy is procured from the farmers by FCI and state agencies, it is handed over to millers for conversion into rice. Paddy to rice conversion ratio is 67%.
This article has been republished from The Financial Express.