Just about 12% or 97 lakh of India’s over 8 crore paddy farmers benefitted from procurement operations during 2018-19 with large variations across states, reflecting the limited utility of the current minimum support price structure that seems more geared for high-volume states like Punjab and Haryana seen as the country’s granaries.
The Centre’s decision to proactively begin procurement of paddy to allay fears of protesting farmers over the fate of minimum support price (MSP) in the wake of newly enacted farm laws may not prove effective beyond a handful of states, going by an analysis of rice procurement data for 2018-19.
More than 95% paddy farmers in Punjab and about 70% farmers in Haryana were covered under procurement operations while in other major rice producing states like Uttar Pradesh (3.6%), West Bengal (7.3%) Odisha (20.6%) and Bihar (1.7%) — a very small number benefited from procurement operations. These figures can well explain why the current protests against the farm laws have not engaged farmers in these states compared to counterparts in Punjab and Haryana chiefly as also Telangana, Andhra Pradesh and Chhattisgarh.
Procurement figures of 2018-19 show that about 89% of total production of Punjab was procured while 85% of Haryana. Other states, where more than half of total rice production was procured included Telangana (62%), Chhattisgarh (57.4%) and Andhra Pradesh (50.7%). Though West Bengal (13.8%) and Uttar Pradesh (13.3%) are largest rice producing states and account for 11.2% and 11.7% of total marketed surplus of rice, their share in procurement was much lower at 4.6% and 7%, respectively.Flagging these variations and lop-sided procurement operations in most states, the Commission for Agricultural Costs and Prices (CACP), the agriculture ministry’s body which calculates MSP, in its 2020-21 price policy for Kharif crops noted how poor access to procurement in UP, West Bengal, Odisha, Bihar and other eastern and north-eastern states forces farmers to resort to distress sale at lower than the MSP.
Since, majority of farmers in these less privileged states in terms of procurement are small and marginal, they have poor access to procurement at MSP. “Therefore, concerted efforts should be made to extend the benefits of procurement to small and marginal farmers in general and eastern and NE states in particular,” said the CACP.
Though the coverage of paddy procurement has expanded to more states and farmers over the years with India recording 44.4 million tonnes of procurement of rice in 2018-19 (up from 38.2 million tonnes in 2017-18), the entire operation continued to be limited to certain states despite availability of marketed surplus in other states.
On the other hand, in case of top two paddy producers, West Bengal and Uttar Pradesh, less than 20% of total production was procured. Quantitatively, the total quantity of rice procured was the highest in Punjab (11.4 million tonnes) in 2018-19 followed by Andhra Pradesh (4.2 million tonnes), Telangana (4.1 million tonnes) and Haryana (3.8 million tonnes). Punjab has the highest share of marketed surplus (13.1%) as well as procurement (28.4%), much higher than production share (11%)— indicating effective procurement systems in these two states.