Despite predictions of deficient rains in the second half of the monsoon, India’s rice production in the current Kharif season may exceed the previous year’s 110 million tonnes (mt), based on initial estimates from states. Accordingly, the food ministry on Tuesday announced that the target for next season’s procurement, beginning on October 1, has been raised marginally to 52.1 mt from the current season’s actual purchase of 49.6 mt. Mint takes a closer look at the latest developments.
- Kharif procurement comprises 86% of the total quantity of rice bought from farmers by the Food Corporation of India (FCI) and state agencies under the Minimum Support Price (MSP) scheme.
- The government on Tuesday set a 5% higher kharif rice procurement target at 52.1 mt for the 2023-24 (October-September) season. It had purchased 49.5 mt of rice in the Kharif season that ended in March.
- Though main procurement is carried out between October and March, purchases in some states such as Assam and West Bengal continue until June as Kharif paddy harvesting is delayed in other states.
- FCI procured more than 56.96 mt of rice as of the end of July. Rice production in 2022-23 was estimated to be a record 135.5 mt.
- This year’s rice procurement drive will be monitored closely, given the anticipated decline in production in the 2023-24 season (July-June) because of deficient monsoon rainfall in many parts of eastern India and floods in the many districts of Punjab.
- Because the monsoon arrived late this year, paddy sowing or transplanting was delayed. Paddy transplantation has been completed in 90% of the cultivated area and is 4% more than in the year-ago period at 36.1 million hectares as of 18 August.
- The government in June hiked the MSP for paddy, the key Kharif crop, to ₹2,183 a quintal, up 7% on-year.
- Paddy arrives in mandis across Punjab, Haryana, Uttar Pradesh and Tamil Nadu during October-November, while farmers bring the grain to Andhra Pradesh, Telangana, Odisha, Chhattisgarh and other key producing states during December-January.
- Higher grain procurement is expected to boost the FCI’s rice stocks. The corporation is selling rice in bulk on the open market through weekly auctions to combat rising prices. However, the response has been sluggish.
- Retail inflation in rice in July was at 12.96%, compared to 12% in June and 4.3% in July 2022. In July the government banned exports of white rice to improve domestic supplies and control prices.
- FCI aims to sell 2.5 mt of rice on the open market to cool down prices. Currently, the agency has 37 mt of rice including 12 mt of grain receivable from millers. The rice stock is against the buffer norm of 10.25 mt for October 1.
- States such as Punjab, Haryana, Chhattisgarh, Odisha, Telangana and Andhra Pradesh contribute significantly to the central rice pool, which is used to supply grain to beneficiaries under the National Food Security Act (NFSA) and free ration scheme. It supplies 35 mt of rice a year to beneficiaries under NFSA.
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