Rice price may surge as Chhattisgarh govt announces bonus on paddy

Move will help farmers earn Rs 1,850 a quintal for common grade and Rs 1,890 for 'A' grade variety

The bonus on paddy crops announced by the Chhattisgarh government would result in the marginal hike of rice price in the state.

The state government had announced a bonus of Rs 300 per quintal on paddy that it would be procuring at minimum support price (MSP) from the farmers. The farmers would get the bonus for two years. Starting from the produce sold in the last kharif marketing season 2016-17.

The decision would help the farmers in Chhattisgarh to earn Rs 1,850 per quintal for common grade and Rs 1,890 for 'A' grade variety of paddy given the procurement at the MSP fixed by the union government at Rs 1,550 for common grade variety and Rs 1,590 for ‘A’ grade variety. 

Traders in the state believe that the high value for the yield given to the farmers would result in the increase of rice price in the open market. Besides, there is also the possibility of short supply in the market that will ultimately inflate the commodity price.

Due to severe drought, paddy production has been affected in the state and the farmers will prefer to sell whatever yield they get to the government due to bonus. The government preliminary report suggested a 30 per cent loss in paddy production due to drought. For the kharif marketing season 2017-18, Chhattisgarh had set a target to procure 6.9 million tonnes of paddy at MSP.

“Since the state government would be procuring about 6.9 million tonnes of paddy and the production would be less, there would be limited quantity left for the traders in open market,” Chhattisgarh Rice Millers’ Association President Yogesh Agrawal said. The farmers had been selling paddy to the millers that was left with them after selling to the government at MSP, he added.

The rice traders also estimate that there would be increase in rice price but that could be marginal. “There is a possibility of 10 to 15 per cent increase in the price of rice,” state’s leading rice trader Gopal Krishna Agrawal said.