But farmers appear to use procurement scheme to elicit higher price for their produce

Paddy prices in Karnataka, which had hit a low this season after a bumper crop, is stated to be stabilising thanks to the support extended by the Central government in the form of a procurement scheme with minimum support price (MSP).

After hitting a rock-bottom price of Rs.800 a quintal in May, paddy prices are now hovering around Rs.1,500 for the Grade ‘A' variety and Rs.1,400 for the common variety. Ironically, growers are not queuing before procurement centres. They are making a beeline for the rice mills that are quoting a marginally higher price than the government MSP, to which the State government has added Rs.100 as incentive.

Sources in the Karnataka Food and Civil Supplies Corporation, nodal agency for paddy procurement, told The Hindu that in all, 21 centres were opened in the districts of Chikmagalur, Davanagere, Mandya, Mysore, Raichur, Shimoga and Yadgir. While the centres in Davanagere were opened about 12 days ago, one was opened at Mandya three days ago owing to a vociferous demand from farmers.

However, not a single quintal has been procured here. It would appear that farmers are using the procurement scheme to negotiate a higher price for their produce.

Benefiting the paddy growers is the mill point rice levy, which is collected for the Central public distribution system. The nearly 300 rice mills in the State have to give 2.5 lakh tonnes of rice to the Central pool. However, subsequent to the March 31 deadline, only around 1.90 lakh tonnes were received from them. With the MSP for paddy at only Rs.1,030 a quintal for the Grade “A” variety and Rs.1,000 for the common variety, they have entered the market to purchase apart from directly purchasing from some large growers.

The authorities have so far purchased 545.573 tonnes of both the “A” grade and the common variety paddy. The rice, after hulling, will be made over to the Food Corporation of India. There is no target for procurement, and the centres will remain open till August 31, the government-notified last date, according to general manager of the Karnataka Food and Civil Supplies Corporation T.H.M. Kumar.

Sources in the State government told The Hindu that there were several checks and balances to counter a steep fall in price and to enable the market price to stabilise.

The mill point levy comes in handy particularly for rice and wheat. The Karnataka Food and Civil Supplies Corporation believes that the paddy rates will, in the days to come, only increase, particularly since the last date for closure of the procurement scheme for the Rabi paddy (known locally as summer crop) is still two months away.

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