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Paddy sowing has already commenced in some regions and is set to pick up pace after July 10. Last kharif season year, farmers recorded about 35 per cent profits on basmati compared to the previous kharif season, primarily due to rising exports, a fall in the rupee against the dollar and a rise in demand in West Asia.
A senior official in the Agriculture and Processed Food Products Exports Development Authority said demand for Indian basmati had risen in the past three years, resulting in a substantial increase in exports. This helped farmers get up to Rs 4,000 a quintal for the commodity last year. This year, it is expected export will remain stable and supplies will rise, as paddy growers are diversifying from non-basmati to basmati. This, however, might result in lower prices.
Ashwani Arora, director of LT Foods Ltd (Daawat basmati brand), said, “Commodity prices are dictated by demand-supply; with farmers growing more rice and new varieties of higher yields (PUSA 1509) introduced, traders project a higher supply this year. So, a farmer who earned Rs 4,000 a quintal last year might get Rs 3,400-3,500 a quintal this year.”
He added the cost of growing new basmati varieties was lower, in terms of the expenditure on pest-control measures. The new varieties are short-duration ones (80-day cycle) compared to earlier varieties and irrigation and supervision costs, too, are lower. As such, basmati remains the favourite compared to other competitive kharif crops (non-basmati paddy and maize). Arora expects a 5-10 per cent increase in export demand, primarily from new markets in Australia, the US and other developed countries.
“Even if the price of basmati slides 20 per cent compared to last year, we are on the safer side with basmati paddy,” says Raj Kumar Phor, a paddy grower from Karnal (Haryana). “Growing vegetables is unviable. We can store paddy at our end, in case of tepid response from traders, and still can make both ends meet. But growing any other kharif crop or vegetables, in the absence of market linkages, does not make business sense.”
Considering the dwindling water table and deteriorating soil health, the state agriculture departments of Punjab and Haryana have been projecting to a five per cent fall in the area under paddy this year.
Ashwani Arora, Director, LT Foods Limited (Daawat brand basmati) also looks forward to a mellowing down of price. "Commodity prices are dictated by demand-supply and with farmers growing more rice and new varieties of higher yield (PUSA 1509) introduced, the traders percieve higher supply this year. So the farmer who earned Rs 4000 a quintal last year may have to be complacent with Rs 3,400- Rs 3,500 per quintal this year."
Adding to this Arora said that the cost of growing new basmati varieties is lesser in terms of expenditure made on pest control measure. Since it is short duration variety (80-day cycle) as compared to earlier varieties and irrigation and supervision costs too, are lower. So basmati paddy remains favorite over other competitive kharif crops (non-basmati paddy and maize).
Arora expects a 5%-10% increase in the export demand owing to demand from new markets in Australia, U.S.A. and other developed countries where people are adapting to Indian foods and resettlement of Indian diaspora.
Even if the price of basmati slides by 20% over the last year, we are on the safer side with basmati paddy, says Raj Kumar Phor, a paddy grower at Karnal (Haryana). Growing vegetable is completely unviable. We can store paddy at our own end if there is a tepid response from the traders and still can make our both ends meet. But growing any other kharif crop or vegetable does not make a business sense in the absence of market linkages.
Taking stock of the dwindling water table and deteriorating soil health the state Agriculture Departments in Punjab and Haryana have been projecting to cut area under paddy (a water guzzling crop) by 5% year-on-year, the absence of ready market for the alternative kharif crop (maize) has been a major roadblock in the diversification.
