Food Corporation of India (FCI), the Centre’s grain procurement and distribution arm, may fall short of its rice procurement target in the ongoing kharif marketing season (October-September) due to a default in levy rice obligations by the Punjab millers.
The FCI says that millers in Punjab owe nearly 500,000 tonnes of rice and have been defaulting to take advantage of the higher open market prices.
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The Corporation has purchased 26.4 million tonnes of rice so far and requires another 1.1 million tonne by September to meet the 2007-08 target (27.5 million tonnes).
The corresponding procurement last year stood at 25 million tonnes. “The open market prices have remained better than the government’s procurement price and consequently certain millers have defaulted on levy obligation,” said Alok Sinha, chairman and managing director, FCI. The procured rice is used for distribution under the various welfare schemes run by the central government.
The millers in the major-rice producing states have an obligation to sell a certain per cent of their produce to the union government as levy at a price decided by the government.
The levy obligation of Punjab millers was raised from 75 per cent to 90 per cent in the current procurement season after a proposal from the state government, added Sinha.
The rice procurement is up in all the major-producing states except Chattisgarh and Haryana. Punjab is the leading contributor to the central pool with 7.87 million tonnes, followed by Andhra Pradesh at 6.46 million tonnes and Uttar Pradesh at 2.83 million tonnes.
While the procurement in Chattisgarh dipped by nearly 400,000 tonnes to 2.4 million tonnes, purchase in Haryana fell by 200,000 tonnes to 1.57 million tonnes. The FCI expects to get another 1.2 million tonnes from West Bengal, Orissa, Chattisgarh and Andhra Pradesh.
