The Telegraph
Friday , January 24 , 2014
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Govt to prod mills to sell rice

- Lack of funds to buy paddy from farmers, stress on procuring quota

Calcutta, Jan. 23: The government has decided to procure most of its quota of rice from mill owners before the usual time to keep the price of the crop in check before the boro season by ensuring that demand does not fall.

The move, sources in the government said, was prompted by the cash constraints of the administration that is hobbling direct purchase from farmers.

The food and supplies department has called the state’s 800-odd mill owners to a meeting on January 28 to urge them to sell as much of the “levy rice” as it can as soon as possible. After the government procures the levy rice, it allows the mill owners to sell a matching amount in the market. The government usually procures the levy rice, which it sends to ration shops, after March.

The government will not have to immediately arrange for the cash to procure the levy rice as it does not pay the mill owners at the time of procurement. The government gives them a receipt. But in case of direct procurement from farmers, the government tries to avoid making them wait for payments.

Food and supplies minister Jyotipriya Mallik said: “We will hold a meeting with all rice mill owners on January 28 in Calcutta and tell them that they should deposit as much of the levy rice as they can before March so that the market price of paddy does not fall. If we can achieve this, the farmers will get a better price for their produce.”

This year, the state government has set a target of procuring 9 lakh tonnes of levy rice from the mills and 13 lakh tonnes from farmers. As the mill owners buy paddy from farmers, government procurement of levy rice will ensure that the demand doesn’t drop and that the cultivators get proper price and don’t have to go for distress sale, a senior food department official said.

However, stress on procuring the levy rice is given when the state achieves its quota of direct purchase from farmers. This year, the government has been forced to focus more on the levy rice as the direct procurement from farmers has not taken off for lack of funds.

As the government could not set up adequate number of camps to buy paddy directly, farmers are being forced to sell paddy at a price lower than the minimum support price of Rs 1,310 a quintal. Although the food and supplies minister said the market price of paddy was above the minimum support price, farmers and traders whom The Telegraph spoke to said it was not so.

Jibon Saha, a farmer in Birbhum’s Muraroi who has sold two quintals of paddy two days ago to a local trader, said he was paid Rs 1,270 a quintal.

The government has so far set up around 200 camps across the state and procured 88,058 tonnes of the target of 13 lakh tonnes.

“As most of the camps were set up at the block level, not the gram panchayat, many farmers did not show interest in taking their produce to faraway places as it would cost nearly Rs 70 a quintal to ferry the crop,” an official said.

Officials said that had the government not been forced to discontinue the practice of offering a bonus on the minimum support price for lack of funds, the farmers could have ferried their produce to the camps. Till 2011, the state used to give between Rs 50 and Rs 70 a quintal as bonus.