Uttar Pradesh clocks 250% rise in paddy procurement at 3.5 mn tonnes

Farmers paid Rs 52 bn through direct benefit transfer

Uttar Pradesh continues to perform robustly in ongoing paddy procurement with total purchases in the current kharif marketing season hitting almost 3.5 million tonnes (MT) mark.

This year, the Yogi Adityanath government is eyeing procurement of 5 MT of paddy, which is an ambitious target considering the state could purchase only about 70 per cent or 3.5 MT of the targetted 5 MT of paddy last season.

The procurement centres established by the state agencies and Food Corporation of India (FCI) directly purchase paddy from farmers against the standing Minimum Support Price (MSP) of Rs 1,550 per quintal (100 kg).

About 3,375 procurement centres had purchased almost 3.5 MT of paddy, which is over 250 per cent higher compared to purchases during the corresponding period last year at 1.35 MT.

About 400,000 state farmers had been paid Rs 52 billion for paddy through Direct Benefit Transfer (DBT) to their bank accounts.

The main aspect of paddy procurement season has been the brisk pace at which it has been undertaken this year, resulting in higher procurement figures, a senior UP food and civil supplies department official told Business Standard.

Meanwhile, the aggregate paddy production in UP, the rice bowl of India, is estimated at 21.812 MT this year, which is about 3 percent short of the initial target.

UP is not only one of the largest paddy producers, but a big consumer of rice under the public distribution system (PDS). The state needs almost 4 MT of custom milled rice for PDS annually.

One of the main reasons of direct purchase is to contribute to the central PDS pool, apart from giving remunerative prices to farmers and providing base price for their produce.

If the paddy procurement targets are met this year, the UP farmers would pocket nearly Rs 77.50 billion from direct sale to government agencies. Farmers are also free to sell paddy to private purchasers or traders. The procurement process had started in October and would continue till February 2018.

Last month, the Yogi cabinet had extended the UP rice export promotion scheme (2017-22) for another five years, exempting direct and indirect rice exporters from UP mandi fee and development levy on both basmati and non-basmati rice brands.

UP rice millers association president Ramakant Modi had said the promotion scheme would spur exports from the state, although he felt that Yogi government should have accorded some more benefits to indirect exporters as well to help the small and medium enterprises.

There are about 3,000 rice millers in UP.  Mostly, coarse rice is exported from the state to developing or third world countries, including Nepal, Bangladesh, Sri Lanka etc. The state basmati is primarily exported to Dubai and other West Asian markets, he informed.