Telangana move to give bonus for superfine paddy varieties evokes mixed response

The Telangana Government’s decision to pay a bonus of ₹500 on a quintal of superfine varieties has been received with mixed reactions from the stakeholders. While farmers are happy that the popular varieties are getting them ₹500 more for every quintal that they sell, some traders have expressed concern over the decision’s short-term impact.

Telangana Civil Supplies Minister N Uttam Kumar Reddy on Monday said the procurement of paddy would begin from the first week of October and continue until January. While common paddy will be procured at the minimum support price, superfine varieties would fetch the ₹500/quintal premium.

Farmers, however, are unhappy with the move questioning the numbers put out by the State Government. They say the superfine varieties which are eligible for bonus are grown only in 15-20 per cent of the area — far lower than the government claims.

“We expect it not more than 40 lakh tonnes, with the remaining varieties being ‘A’ and ‘C’ varieties that are not eligible for the bonus. We demand the government to offer the bonus for all varieties of paddy as promised by the Congress party during the Assembly election campaign,” a senior functionary of Telangana Rythu Sangham said.

Focus on consumed varieties

BV Krishna Rao, President of the Rice Exporters Association, said the Telangana move would help farmers shift from growing paddy suiting Food Corporation of India (FCI) needs for building buffer stocks to varieties that are consumed more by the people.

“This is better than what Chhattisgarh and Odisha are doing. They are paying all paddy farmers. But Telangana will pay only those who grow these widely consumed varieties,” he said.

Beginning this kharif marketing season, the Telangana Government said it would implement the Congress party’s poll promise of giving a bonus to the paddy farmers. Of the 24 lakh hectares of paddy area, fine varieties are grown on 15 lakh hectares. Out of the estimated production of 14.6 million tonnes of paddy, fine varieties comprise 8.8 million tonnes.

The Government is opening over 7,000 procurement centres with a target to procure 9.1 million tonnes.  

Heading for new normal

“Paddy prices are heading for the new normal due to State-declared support prices and climate change. The domestic market will witness a gradual correction in the next one year. Most of the common rice export is sourced from Telangana, Andhra Pradesh, and Chhattisgarh,” said S Chandrasekaran, New Delhi-based trade analyst.

“The export prices will increase in the short term.  Such an increase will be supported by the trends in South-East Asian countries.  It is important to note that basmati paddy and common rice paddy prices are heading for a convergence,” he said.

M Madan Prakash, President of  the Agricultural Commodities Exporters Association, said it would not have much impact on exports.

“Our parboiled is very competitive in the global market. So this will not make much impact,” he said.

“We don’t see much impact on the trade. After some fluctuations, prices will stabilise. We don’t see any challenge,” a senior functionary of the Telangana Rice Millers’ Association observed.

Inter-State consignments

As it gets ready for the payment of the bonus, the Telangana Government said it would keep tabs on likely inflows of paddy consignments from the neighbouring Andhra Pradesh and other paddy-growing States.

“We will take serious action against the offenders. We will increase vigil across the borders,” a government official said.