UP eyes 5 mt paddy procurement; payout to farmers estimated at Rs 85 bn

The state will set up about 3,000 procurement centres across UP during the entire 5-month kharif season

In the crucial election year, the Yogi Adityanath government in Uttar Pradesh is targeting paddy procurement of 5 million tonnes (mt) in the kharif season of 2018-19. 

The paddy procurement process kicked off on Monday in western UP and some central UP districts and will continue till January 2019-end. Procurement in eastern UP and the remaining central UP districts would start from November 1 and continue till February 2019-end. 

The state Cabinet had earlier hiked the minimum support price (MSP) for paddy by Rs 180 to Rs 200 per quintal (100 kg). While the price was revised from Rs 1,550 to Rs 1,750 per quintal for the common variety and that for Grade-A paddy was upped from Rs 1,590 to Rs 1,770. 

Besides, the government had announced a bonus payment of Rs 20 per quintal over the MSP, up from Rs 15 per quintal given last year. This way, farmers would pocket an extra Rs 185 to Rs 205 per quintal compared to the previous year. 

If the government is able to meet its procurement target of 5 mt, the total payout to the state's farmers is likely to be more than Rs 85 billion. In the recently concluded wheat procurement season, the government had overachieved its target of 5 mt by procuring a total of 5.3 mt of wheat. 

The state would set up about 3,000 procurement centres across UP during the entire 5-month season (Oct-Feb).

Meanwhile, a senior UP food and civil supplies department official told Business Standard that more than 170,000 farmers had already registered for procurement. Last season, 491,000 farmers had registered themselves online. "The revenue department would also verify farmers' claims with their land records to ensure that only genuine farmers are onboard to benefit from the MSP system."

In 2016-17 and 2017-18, the state had posted paddy procurement figures of 3.5 mt and 4.3 mt, respectively, against the target of 5 mt. 

The paddy farmers would be paid through direct benefit transfer (DBT) in their bank accounts within 72 hours of the purchase, the official added.

For this kharif season, UP's paddy acreage is estimated at 6 million hectares (MH). UP is not only one of the largest paddy producers, but a big consumer of rice, too, under the public distribution system (PDS). The state annually requires almost 4 mt of custom-milled rice for consumption.

Such government-led procurement ensures adequate contribution to the central PDS pool, apart from facilitating remunerative prices to farmers and setting a price benchmark for their produce. Farmers are free to sell paddy to private purchasers or traders.

Mostly coarse rice, and sometimes basmati, is exported by the state to developing or third world countries, including Nepal, Bangladesh, and Sri Lanka, among others.