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Wednesday, October 28, 2020

As early variety arrival peaks at Punjab mandis, Basmati rates plunge record 34%

Punjab Mandi Board (PMB) officials informed that the rate of the crop started at Rs. 2,400 per quintal in the first few days, but now with as arrival of the early variety of the crop is about to touch its peak, the rates have crashed badly.

Written by Anju Agnihotri Chaba | Jalandhar | September 18, 2020 10:55:16 am
Fresh concerns for basmati exporters awaiting Iran duesFarmers call the low price being offered to them as an impact of the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance. (Representational image)

As Pavitar Singh, a farmer from Tarn Taran’s Khabe Dogran village, closed the deal on 40 quintals of early Basmati variety (PUSU 1509), his return was almost Rs. 1000 per quintal less than last year.

While last year Pavitar Singh had sold the same variety at over Rs. 2,500 per quintal, this year he has sold it for Rs. 1,651 per quintal.

It is a double blow, says the farmer, pointing out that his yield this year is around 10 quintal less per acre. The low price the crop is fetching for farmers in Punjab’s Majha region, which is the hub of Basmati crop in the state, is happening at a time when the rates of Basmati in the international market are almost all-time high between Rs. 5,000 to Rs. 7,000 per quintal and exporters are earning a huge profit.

“What I have sold at Rs. 1,651per quintal, traders will sell at the rate of Rs. 3,000 to 3,200 per quintal, and then it would be exported for over Rs. 5,000 per quintal,” said Pavitar Singh, adding that he could not hold out for long hoping for better price as he has no place to store his produce. The Tarn Taran farmer grows the early variety on 20 acres out of his 60 acres farmland and has so far harvested PUSA 1509 only on 3 acres.

While the early variety (1509) arrival has started peaking at the mandis, the late ones (1121, 1718) will come in October. Punjab Mandi Board (PMB) officials informed that the rate of the crop started at Rs. 2,400 per quintal in the first few days, but now with as arrival of the early variety of the crop is about to touch its peak, the rates have crashed badly.

Basmati crop is not purchased by the government, and the private players — exporters, local traders and sheller owners – who purchase it have to pay a 4.50 per cent Mandi fee and Rural Development Fund (RDF) to the PMB. This tax is refundable to the exporters.

“They are offering a lesser price because they know that as per the ordinance they are not supposed to pay 4.50 per cent taxes and also because the government has not refunded their previous years’ taxes. So, when they failed to get back their refundable amount from the government, they started targeting farmers and paying less to them while making huge margins themselves,” said a senior officer in PMB, adding that ultimately it is the farmer who will face the losses.

“The big traders are calculating and deducting their 4.50 per cent taxes before paying farmers and it is big loot,” he added.

Farmers call the low price being offered to them as an impact of the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance.

Farmer Gurinder Singh also sold 38 quintals at Rayya Mandi in Amritsar at the rate of Rs. 1,800 per quintal on Wednesday.

Similarly, Aman Kaler of Ajnala in Amritsar also sold his Basmati produce for Rs. 1,800 per quintal.

Bhartiya Kisan Union (BKU) Dakuanda General Secretary, Jagmohan Singh, said that the government can now see for itself how much the ordinance would help farmers.

“For non-government purchase crops, the private players always join hands and offer farmers as per their own wishes and same would happen with assured market crops like wheat and paddy when this ordinance will come into existence,” he said, adding that for Basmati farmers were getting price lower than paddy (parmal rice).

“Traders are telling us that rate would not go up due to Covid-19 and farmers have no choice but to sell at this price only as they cannot store their produce for long,” said another farmer, Davinder Singh, who has grown PUSA 1509 on 30 acres and will start harvesting in the coming week. He added that that “traders gang-up and create false price in the market when the crop’s arrival in the mandis is at the peak and after purchasing from farmers the rates are suddenly changed and go up”.

Punjab’s Basmati is mainly exported and it contributes more than 40 per cent of the total export of Basmati worth Rs. 34,000 crore per annum.

Vijay Kalra, President of the Federation of Arhtiya Association Punjab, admitted that the rate is less as compared to last year. He said that in Amritsar it was purchased around Rs. 2,200 to 2,300 per quintal in the beginning but now some farmers are getting less because there must be high moisture in the grain currently.

Director, Punjab Agriculture Department, Dr Sutantra Airy said that they have worked hard to increase the area under paddy as it is the best alternatives to water-guzzling paddy, but the fluctuation in rates would discourage farmers to increase the area further. He said that Centre must control these rates to ensure farmers do not suffer.

Out of a total of around 6.60 lakh hectares of the Basmati area, PUSA 1509 is sown on around 40 per cent of the area.

Exporters not purchasing yet

The Basmati exporters, who are major buyers of Basmati in Punjab, have boycotted the purchase of the premium rice from the state unless the Punjab government does not waive off Market Committee Fee and Rural Development Fund (RDF).

Ashok Sethi, Director, Punjab Rice Millers and Exporters Association, said: “We have demanded from the government a complete waiver of Market Fee and RDF, which is 4.5 per cent, and only after that we will purchase it.” He added that there is no point of charging it because it is refundable. “Punjab government has not refunded Rs 200 crore pending amount of these taxes for the past few years,” he said.

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