Has Modi Government Procured All Paddy Harvested This Year In Punjab At MSP? Here Are Some Pointers

The Narendra Modi government seems to have procured all the paddy harvested by Punjab farmers since the Kharif Marketing Season began on 1 October this year.

According to a PIB statement, paddy procurement from Punjab accounted for 20.28 million tonnes (mt) or 67 per cent of the 31.8 mt paddy bought across the country. This means paddy procurement from Punjab alone accounted for two-thirds of the total procurement across the country.

Now, here comes the twist.

As per the Ministry of Agriculture’s First Advance Estimates of production of foodgrain, Kharif rice production will likely be 102.36 million tonnes (as against 101.98 mt last year).

Going by procurement data, the total paddy purchase till now can yield 21.30 mt of rice. This means the Centre has procured over 20 per cent of the estimated Kharif rice production this season (July 2020- June 2021).

In Punjab alone, its paddy procurement can yield 13.58 million tonnes of rice. Paddy is cultivated in the northern State only during the Kharif season, which means its production for this crop year to July 2021 has been completed.

According to data, Punjab produced 12.82 mt of rice last year against 13.38 mt in 2018, highest in recent years..

Punjab also cultivates Basmati, which makes up over 10 per cent of total production. Leaving this aside, let's examine the procurement data closely.

The point is: when the State’s highest production in recent years has been 13.38 mt how is the FCI showing that 20.28 mt of paddy that can yield 13.58 mt of rice has been procured?

There can be two angles to this.

One, rice production this year is high.

Or, two, as is being alleged paddy bought from other States such as Uttar Pradesh has found its way into Punjab.

Also, farmers retain part of their produce as seeds or for own consumption. Even if we assume that they retain 10 per cent - far lower than the normal 30 per cent - there is something amiss in this.

And this is another indicator as to why such a strong opposition to the agricultural reforms. The reforms could lead to farmers in other States such as Uttar Pradesh looking for buyers of their choice rather than hand their paddy to Punjab traders.

The MSP procurement is clear proof that Punjab continues to get special treatment, despite its farmers opposing agricultural reforms. Or are their fears based on such procurement?

In terms of expenditure, the Modi government has spent Rs 38,280.66 crore in Punjab alone out of the total expenditure of Rs 60,038.68 crore on paddy procurement. This is just for buying paddy at the MSP of Rs 1,888 a quintal.

In addition to this, the Centre will now have to pay mandi fees, development cess and arhatiyas (commission agents) commission totalling another 8.5 per cent in Punjab.

In other States, these payments, made by the Food Corporation of India as the nodal agency for procurement, are lower. There will be transportation and loading costs, too, to go along with this.

The Centre procures particularly foodgrains from farmers at minimum support prices (MSP) to maintain buffer stocks that can help distribute rations through the public distribution system (PDS) and meet any food emergency such as drought and floods.

This year, especially when the country has been affected by the spread of novel Coronavirus (COVID-19) pandemic, the government has been using the stocks to supply over 10 mt of foodgrains - wheat and rice- to the below poverty line people under the Prime Minister Garib Kalyan Yojana.

The two-thirds of total procurement from Punjab comes at a time when farmers from the northern State are leading a protest against the agricultural reforms brought by the Modi government this year.

The reforms allow farmers to sell their produce to any buyer of the choice even as it allows the agricultural produce marketing committee (APMC) mandis to co-exist.

Besides paddy, the Modi government has also procured cotton, through the Cotton Corporation of India (CCI), from Punjab. Though a break-up is not available, the CCI has procured 29 lakh bales (170 kg each) benefitting 5.81 lakh farmers at a cost of Rs 8,515. 53 crore.