Punjab likely to miss paddy procurement target on high State levies

Even as the Union Food Minister Pralhad Joshi has assured that rice procurement in Punjab will be as per target, the evacuation of grains to other States is likely to take time and purchases may be impacted this year. However, if the State has to avert discontent among farmers, it will have to waive off mandi fees and reduce the commission of arthiyas (commission agents), which work as deterrent for private traders to buy the paddy, experts said.

Highly places source said the Centre targets to evacuate 13-15 lakh tonnes (lt) of grain (wheat, rice/paddy) every month and as much as 80-90 lt can be translocated out of Punjab until March 31. The State has a target to buy 124 lt of rice this year during the procurement period that began on October 1 and will continue until November 30. So far, 20.60 lt of rice has been purchased, which is 36 per cent lower from about 32 lt in the year-ago period.

Insufficient

“The real problem with Punjab is high level of fees and commission they have permitted which are working as deterrent for private trade to buy from the State. Though the Centre has been insisting on paying a lower amount as per the maximum cap fixed by it as market fee and commission, it is still insufficient to allow private participation in paddy purchase,” said Vijay Setia, a former president of All India Rice Exporters Association. He suggested more level playing fields for business as in other States with regard to fees and commission.

Setia said the State government should find a solution rather than seeking help of Centre when farmers have blocked roads at more than 50 places. “Let the rice millers buy paddy from farmers and government fix a purchase price of rice after considering all expenses. Upon showing of proof of paddy purchased at MSP from farmers, rice millers can be paid as per the declared cost,” Setia said, adding such an arrangement can eliminate other charges like handling and administrative costs for FCI.

Sources said FCI pays about ₹46/quintal as commission to agents (arthiyas) and also pays 3 per cent mandi fees in Punjab, which has been fixed by the State apart from rural development cess of 2 per cent for paddy purchased by private trade. Besides, traders also have to pay another 2.5 per cent commission to agents.

Picking up

Though the Union Agriculture Ministry has fixed a maximum cap of 2 per cent as mandi fees that States can charge for procurement under any Central scheme, FCI is not able to enforce it in Punjab, the sources said.

Farmer leaders on Thursday criticised the State government for its inefficiency in making arrangements for paddy procurement and announced that they will block National Highways at three places on October 26 if the purchases are not made smooth by then.

Meanwhile, the total (all India) rice procurement has reached 48.94 lt as of October 23, which is 26 per cent lower from nearly 66 lt a year ago. In Haryana, the procurement has reached 25.6 lt, which is 16 per cent lower from 30.5 lt a year ago. In Tamil Nadu, the procurement is 2.5 per cent higher at 2.63 lt as against 2.57 lt a year ago.

“The procurement has picked up substantially in Punjab and Haryana as FCI has been able to buy nearly 28 lt in past eight days. There will be more improvement in the coming days,” an official source said.