FCI likely to procure 9% more rice

Food Corporation of India, the country's biggest buyer of food grains, expects to procure 9 per cent more rice from farmers in the year to March because of a bigger crop, helping bolster state reserves of the grain.

The government will be able to buy 27.5 million tonnes in the period, up from 25.2 million tonnes a year ago, because of bigger harvests in the states of Punjab, Orissa, Chattisgarh and Andhra Pradesh, Chairman Alok Sinha said in an interview yesterday.

The country is building stockpiles of food staples to ease supply constraints and curb inflation that reached a two-year high in January.

The government has raised prices it assures growers of wheat, rice and lentils, and banned exports of the commodities.

"We have no doubt that we'll be able to procure sufficient rice, boosted by our key supplying states,'' Sinha said in New Delhi. "There will be no problem on rice supplies.''

The government will pay Rs 745 ($19) for a quintal (220 pounds) of the common grade of rice grown in the June-to-September rainy season, compared with Rs 695 announced in October. The price of the grade-A rice has been increased by Rs 50 to Rs 775. Prices have been raised thrice this year.

India may harvest 93 million tonnes of rice this year, little changed from last year, the agriculture ministry said in September.

The government buys food grains at guaranteed prices from farmers for distribution to the poor at subsidised rates through state-run shops across the country. The assured prices are meant to protect farmers from distress sales in the open market.