For Parikshit, a farmer in Karnal, who has tilled six to seven acres of his land with basmati variety (the premium variety of paddy), in surge of better remunerations, hopes have dashed. Prices of basmati variety he sowed, has come down this year by over 30 per cent. Prices of CSR-30, a basmati variety, is prevailing atRs 1,670 per quintal compared toRs 2,750 per quintal last year.
Similar has been the fate of Ishwar Dayal who had sown basmati in 15 acres of land. Fates of both the farmers shared by several other basmati growers in Punjab and Haryana, reflect a common attitude, bringing down the area under basmati cultivation in the next kharif season.
However, the key question remains who is to be blamed for the falling basmati prices.
Rice exporters maintain things on export font are not rosy this year and this has been the primary factor behind depressed prices. Export prices this year have remained around $850 per tonne as against $1000 tonne last year.
Vijay Setia, president, All India Rice Exporter Association maintained, basmati exports for the month of September has dipped by 22 per cent while the fall in October was 38 per cent. Setia believes exporters’ greed is the main reason behind falling exports of basmati in the last two months.
Rice exporters, since the last couple, of years have started working on Document against Acceptance system (DA) system, which is risk inherent, as against LC system, practiced earlier. DA system, importers have to give payment within 60 days of acceptance of documents. However, payments have been delayed by importers mainly in Iran, which continues to be a major market for basmati exporters.
Also Read
Europe, Iran and Saudi Arabia are the major markets for basmati exporters from India. Setia adds, “With exporters exhausting their capacities to work on credit and with payments being deferred by importers, exporters are reluctant to purchase fresh stocks, thereby making farmers suffer.”
Sushil Jain, president, Haryana Rice Exporters Association adds, production of basmati in last few years has increased tremendously, which is not in equilibrium with the demand, and is another factor behind depressed prices. Area in Punjab and Haryana — the two prominent basmati growing regions has surged this year.
Till three years back, there was production of 4-4.5 crore bags of basmati, which now has moved up to 15 crore bags. While demand continues to be the same, supply has risen abruptly leading to mismatch between demand- supply equation.
Also, Europe, since last year has been objecting to variety of basmati exported from India, which failed to meet the EU standards due to high pesticide content. This again has impacted the outflow of basmati exports.
Eventually, it is the farmer who is boring the brunt of fall in export prices and needs to be incentivised. Vijay Kumar Setia believes at this particular time, farmers need to be incentivised by the government, so that their miseries could be abated.