Despite higher MSP at govt procurement centres, farmers prefer selling paddy to private traders

Against the government's MSP of Rs 2,040 per quintal of paddy, private traders in Uttar Pradesh offer Rs 1,900 per quintal. Still, farmers prefer to sell their paddy to the traders. Gaon Connection travelled across Raebareli, Unnao and Barabanki districts to find out why. A ground report.

Sumit YadavSumit Yadav   18 Nov 2022 9:53 AM GMT

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Despite higher MSP at govt procurement centres, farmers prefer selling paddy to private traders

A deserted procurement centre in Uttar Pradesh's Unnao. Photo by Sumit Yadav

Sumit Yadav & Virendra Singh

Raebareli/ Unnao/ Barabanki, Uttar Pradesh

The closest government procurement centre to his village in Raebareli offered Om Prakash Yadav a better price for his paddy, but the 45-year-old farmer from Vasauna Kheda village, preferred to sell his 40 quintals of paddy to a private trader (1 quintal = 100 kilogrammes).

"I sold it to the trader right here on my khet [agricultural field] and was paid instantly. The trader bought the produce for Rs 1,900 per quintal which is Rs 140 less than the government's samarthan moolya [minimum support price]," Yadav, who owns four bighas (almost an hectare) of agricultural land, told Gaon Connection.

Over 100 kilometres away, in Barabanki district, it is the same scenario of farmers selling their paddy crop to private traders.

"Last year, the difference between samarthan moolya and the market price was almost twice. The samarthan moolya was Rs 1,940 while the market rate was around Rs 900-Rs 1,100. As a result, almost every farmer was ready to queue up at the procurement centres," Prem Kumar, a farmer from Kaitha village in Barabanki told Gaon Connection.

"This year, the situation is just the opposite. Farmers are getting almost the same price for their produce right at their doorsteps so why go to the sarkari kendra," he added.

According to the farmers, there were too many hassles in carting the paddy all the way to the bikri kendra [procurement centre].

Also Read: After a drop in wheat production due to early heatwaves, now paddy crop likely to be hit by deficient rainfall

It is the peak season for paddy procurement in Uttar Pradesh, which is India's second biggest paddy growing state, but farmers are preferring to sell their paddy to private traders in open market than to sell their crop on the MSP to the government centres. This despite the fact that the MSP of paddy is Rs 2,040 per quintal, which is higher than what the private traders are offering.

Procuring paddy is crucial for the Indian government to run the world's largest public distribution system (PDS) and to meet its commitments for subsidised food grains under the National Food Security Act, 2013. The 2013 act covers up to 75 per cent of the rural population and 50 per cent of the urban population under Antyodaya Anna Yojana (AAY) and priority households. While AAY households, which constitute the poorest of the poor, are entitled to 35 kg of foodgrains (rice or wheat) per family per month, priority households are entitled to 5 kg per person per month.

Paddy woes

Paddy production this year is already affected due to deficient monsoon rainfall (June to September) in the key paddy growing states in the Indo-Gangetic belt. The crop was further affected when October floods washed away ready-to-harvest paddy in several districts of Uttar Pradesh. In such a scenario, farmers selling paddy to private traders and not at the procurement centres could add to the worries of the government.

According to the farmers, there were too many hassles in carting the paddy all the way to the bikri kendra [procurement centre].

"The bikri kendra is almost 18 kilometres away. I have to hire a tractor trolley to take my produce to the centre and the government officials there raise several questions on the quality of produce. The trader on the other hand just takes the produce off my hands," Prakash Yadav from Raebareli said. "The money I save by not having to spend it on transportation to the procurement centre, made up for the price difference between the MSP and what I get from the trader," the farmer added.

Government officials accept the slow pace of paddy procurement. "The procurement of paddy has been delayed this time due to less monsoon rainfall and vagaries of weather," Ramanand Jaiswal, the district distribution officer in Raebareli, told Gaon Connection.

Also Read: Farmers raise demands for compensation as UP, Bihar, Jharkhand gear up for 'drought-like conditions'

"A total of 77 paddy procurement centres have been set up in the district this year but the procurement has been recorded only on four such centres so far. And, 21.36 tonnes of paddy has been procured till November 11. The target we have for this year is 185,000 MT [1,850,000 quintals]," Jaiswal said. "We have received inputs about some private traders buying paddy from farmers at prices as high as Rs 2,000 per quintal.

There are reports pouring in of how the paddy is of poor quality this year, hence farmers not bringing it to the government centres.

"The quality of paddy produced this year is not really good. The low monsoon rainfall and floods in October are responsible. The procurement centres have stricter rules for the quality of produce as compared to the traders," Jeet Singh, the distribution officer in the Fatehpur block of Barabanki district, told Gaon Connection.

"Also, it's the rabi [winter] sowing season, the farmers don't have time to wait in the long queues at the procurement centres. That is also the reason behind the low footfall at these centres," Singh added.

According to Ramesh Kumar Srivastava, the district distribution officer in Barabanki, out of the 185,000 MT [metric tonnes] of paddy which is targeted for procurement, a total of 3,985 MT of paddy has been procured till November 12. There are 63 procurement centres in the district.

Farmers selling paddy to private traders and not at the procurement centres could add to the worries of the government.

Also Read: Uttar Pradesh: First drought, and now 683% excess rainfall in October wreaks havoc on farmers

High procurement target despite fall in sowing area

Interestingly, despite the agriculture ministry's Directorate of Economics and Statistics having noted a reduction in the production of paddy this year from its target of 112 metric tonnes [MT] to 104.99 MT, the Union Ministry of Consumer Affairs, Food & Public Distribution, in a press release dated August 30, mentioned that this year 51.8 MT rice has been estimated for procurement this year which is higher than last year.

According to the press release, "For the Kharif crop of current KMS [Kharif Market Season] 2022-23, a quantity of 771 LMT [lakh metric tonnes] Paddy (518 LMT in terms of rice) has been estimated to be procured as against 759 LMT paddy (510 LMT in terms of Rice) actually procured during last KMS 2021-22 (Kharif Crop)."

Gaon Connection has been reporting on the drought-like conditions which prevailed during the sowing season of paddy in the leading paddy-producing states of Uttar Pradesh, Punjab, Bihar, Jharkhand and West Bengal in the kharif season.

The low rainfall in these states had adversely affected the sowing of paddy and its acreage was reduced according to an official document on the crop situation released by the agriculture ministry on September 30.

It showed that there has been a decreased sowing of paddy by minus 20.16 per cent as compared to the previous year. From 42.304 million hectares of sown area in 2021, this year the area under paddy cultivation dropped to 402.88 lakh hectares this year.

Also Read: Trouble in the Rice Bowl of Bengal

According to Jeet Singh, the distribution officer in the Fatehpur block of Barabanki district, they had roped in gram pradhans [village heads] and kotedaars [public ration distributors] to convince farmers to come to the procurement centres. "We hope that more farmers will get their paddy procured in the coming days," he said.

For the farmers, it is imperative that they have ready cash to pay the labourers who work on their fields.

"The sooner we have cash in our hands the better it is. Landless labourers who work on my fields have to be paid at the earliest, or else I will have problems getting them to work on my field in the next season," Aditya Yadav, a farmer from Sahab Kheda village in Unnao, told Gaon Connection.

Will low paddy procurement threaten the country's food security? "In terms of food security, a year of low procurement hardly makes a difference because the stocks maintained by the Food Corporation of India are enough to sustain the demand for at least four-five years but the prices of rice will definitely go up in the coming months," Balram, a Jharkhand-based food activist working for Rozi Roti Foundation, told Gaon Connection.

With inputs from Pratyaksh Srivastava in Lucknow, UP.

#RiceProduction #Paddy #FoodProduction #FoodSecurity 

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