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Sources say states reject Centre’s proposal to limit rice procurement

15 September 2020


Most major rice procuring states have rejected the Centre's proposal to limit rice procurement in order to check the increase in stocks in the central pool, senior government officials told Cogencis.


The Centre had proposed bringing in state-wise limits on procurement of the staple food grain, particularly in states where such purchases are higher. The NITI Aayog had earlier recommended the government consider changing the "open-ended" rice procurement policy. Weak private sales at weekly auctions have added to the excess stocks.Rice is procured during both kharif and rabi seasons. Currently, the government purchases all crops offered by farmers during the procurement period if they meet certain quality parameters.


At the beginning of July, the government had 26.6 mln tn of rice in the central pool, almost double the mandated buffer requirement of 13.5 mln tn as on Jul 1.It is difficult to get the proposal approved by states as they believe it is bad for political optics, an official said.States believe the "close-ended" rice procurement scheme can't be implemented given the current economic situation, as it may hit the farmers of the largest-grown food grain financially, according to an official.  "Some states feel that since the farm sector could register a growth in the latest GDP figures, this might be a discouragement for the farming community," he said. 


During Apr-Jun, the country's overall GDP contracted a massive 23.9% as against a 5.2% growth in the year-ago period. However, the agriculture sector reported a 3.4% growth in the June quarter as against the 3.0% growth recorded last year.Most states have estimated rice procurement in the upcoming season beginning October to be higher than last year. "Most states were also sceptical of pushing this proposal this year, as they had already promised to procure the maximum quantity possible to help farmers get a better return," another official said. The Centre has pegged rice procurement in the 2020-21 (Oct-Sep) kharif marketing season at 49.5 mln tn. In the previous season, the government had bought 42.0 mln tn rice, as against an initial estimate of 41.6 mln tn.



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