UP eyes 2.5 mn tonnes paddy procurement in 2013-14

The rice procurement season would be effective for six months - from October 1 to March, 2014

In spite of lack of preparations, the Uttar Pradesh government is targetting procurement of 2.5 million tonnes (mt) of paddy during 2013-14.

The Food Corporation of India (FCI) would procure 10 per cent of the 2.5 mt target, while the rest would be procured by the state agencies.

The rice procurement season would be effective for five months — from October 1 to February, 2014 — and about 3,250 procurement centres would be set up.

According to the agriculture department, paddy acreage this year stands at 5.964 million hectares (MH) as compared to the target of 5.947 MH. The preliminary paddy production is estimated at 15.30 MT.

The food department’s procurement centres are mandated to pay farmers through Real Time Gross Settlement (RTGS) system, which directly credits money to their bank accounts. The remaining centres would pay by means of account payee cheques.

UP Food Commissioner Archana Agarwal said the total warehousing capacity in UP stood at 3.765 mt. FCI is tasked to prepare an action plan for storage of rice.

The government would accord priority to modernised rice mills in custom milling and levy obligations.

In UP, rice millers have the obligation of 25 per cent rice levy, which is collected by the state for public distribution system (PDS). Under custom milling, the government procures paddy from farmers and gets it milled by paying incidental charges.

“The mills incur Rs 60 in milling per quintal of paddy, while the state has been paying only Rs 10 per quintal as milling cost for the last 10 years. This is grossly inadequate and a loss making proposition. For this reason, the millers are not excited about custom milling,” Uttar Pradesh Rice Millers Association President Rakesh Kumar Agarwal told Business Standard .

The millers have also demanded abolition of rice levy, citing lower realisation.

Paddy is cultivated across UP, while seven districts fall under high productivity, including Bijnore, Kushingar, Pilibhit, Chandauli, Baghpat, Ambedkar Nagar and Varanasi.

Paddy is highly dependent on south-west monsoon, which occurs over the subcontinent from June through September. The kharif crop is chiefly sown between March and August and harvested between June and December.

There are about 1,000 large rice mills in UP, while the number of smaller units is about 3,000. A large mill has a capacity to mill three to four tonnes paddy per hour.

The main elements in mills’ modernisation are dryer and sorting machines, which cost about Rs 20 lakh and Rs 50 lakh respectively. Only about 10 per cent of the state rice mills are equipped with these machines.

The millers have been urging the government for a five year window for modernisation and providing 25-30 per cent subsidy on the cost.