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Encouraged by higher realisation last year, farmers have rushed to ensure basmati paddy seed to cover sowing in the maximum possible area this kharif season.
They fear scarcity could reduce their potential sowing area and, thereby, the chances of higher earnings. To cash in on the farmers’ rush, stockists are selling basmati seeds at 100 per cent premium over the procurement price in major growing states such as Punjab, Haryana and Uttar Pradesh.
According to trade sources, traditional basmati seed is selling between Rs 46 and Rs 48 a kg, compared with Rs 22-23 a kg last year. Similarly, the sowing quality of Pusa basmati (PB 1) and Pusa 1121 are quoted between Rs 38 and Rs 39 a kg and Rs 41-43 a kg now against Rs 19-20 and Rs 20-21 last year, respectively.
The farmers’ excessive encouragement has not yet resulted in a shortage of seed, though. Stockists are releasing seeds intermittently to derive a maximum benefit. The enthusiasm is set to result in additional acreage and automatically, thereby, more output this year. Also, exports, especially of Pusa 1121 variety, would go up.
“We are estimating 20-25 per cent higher acreage this season on farmers’ enhanced encouragement over last year’s better realisation. Also, early rainfall this monsoon season has boosted their sentiment positively,” said Vinod Ahuja, president, Basmati Rice Farmers and Exporters Development Forum.
Data compiled by the Agricultural and Processed Food Products Export Development Authority showed exporters’ average realisation shot up 16 per cent to Rs 56.10 a kg in 2012-13, compared with Rs 48.61 a kg in the previous year. In 2010-11, exporters’ average realisation was recorded at Rs 47.90 a kg. A similar increase was witnessed in realisation from domestic markets also. The average cost price for growing basmati rice works out to Rs 16-17 a kg.
“Despite a significant increase in the minimum support price (MSP), cotton and sugarcane disappointed farmers last year. With the increase in paddy MSP this year, a number of farmers have evinced interest in shifting to basmati. Hence, the increase in area may proportionately raise basmati rice output this year,” said Ahuja.
Interestingly, the Punjab government has waived taxes on basmati rice, which were as high as 12 per cent across all varieties.
“We can see at least 25 per cent increase in acreage and, therefore, a proportionate jump in the output of basmati rice,” said Gurnam Arora, joint managing director, Kohinoor Foods Ltd.
India exported 3.46 mt of basmati rice realising, thereby, Rs 19,390 crore in 2012-13, compared with 3.18 mt and Rs 15,450 crore in the previous year.
Vijay Setia, former president of the All India Rice Exporters’ Association, however, is convinced that the acreage would be much higher this season on assumption of higher demand from countries such as Iran, Saudi Arabia, the United Arab Emirates and other Arab nations in addition to the existing developed countries would continue.
