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Punjab: When global slump took away the premium tag of basmati

Farmers are unanimous that Punjab hasn’t seen such bad days, with one or the other crop failing in consecutive seasons — and now basmati selling even below parmal.

Written by Anju Agnihotri Chaba | Jalandhar |
October 15, 2015 1:44:07 am
Punjab farmers, rain crop damage, crop damage, paddy crop, Basmati farmers, Punjab crop farmers, farmers of Punjab, crop prices, Punjab crop prices, Punjab news, India news, nation news Farmers sold their 1509 paddy at Rs 950 to 1,200 per quintal during the first week of crop arrivals, as against Rs 2,200 last year and Rs 3,500 the year before. (Source: PTI)

When farmers in Punjab began taking the harvested grain from their Pusa-1509 superfine basmati paddy crop early this month, they were shocked to see it fetch rates below not just half of last year’s levels, but even the official minimum support price (MSP) of Rs 1,450 per quintal for regular ‘parmal’ varieties.

Farmers sold their 1509 paddy at Rs 950 to 1,200 per quintal during the first week of crop arrivals, as against Rs 2,200 last year and Rs 3,500 the year before. Realisations for the other popular improved basmati variety Pusa-1121, too, ranged between Rs 1,750 and Rs 1,990 per quintal, whereas these ruled at Rs 3,000-3,300 and Rs 5,100 in the preceding two years.

“We haven’t seen such low prices for so-called premium paddy. And yet, the government expects us to diversify from regular paddy and wheat cultivation,” said Amarjit Singh, a farmer from Bhogpur in Jalandhar district.

“I have huge debts to pay to my commission agent. I had hoped that my basmati crop would fetch a decent price and enable me to discharge these dues. But that’s going to be difficult now, forget marrying off my two grown-up daughters this year,” said Ajmer Singh from Nakodar in the same district.

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Farmers are unanimous that Punjab hasn’t seen such bad days, with one or the other crop failing in consecutive seasons — and now basmati selling even below parmal. The Rs 900-1,000 per quintal price being received will barely cover half of the production cost of Rs 1,800-2,000, they claim.

The main reason for lower prices is exports. The value of basmati shipments from India fell from $4,866 million in 2013-14 to $4,518 million. In April-August this fiscal, they have contracted further to $1,559 million, from $2,031 million during the same period of 2014-15. Average export prices have also declined to $650-700 per tonne from $1,800 levels three years ago. Low export demand has, in turn, impacted domestic paddy realisations for farmers.

Although the Punjab government has decided to procure basmati at the MSP of Rs 1,450 per quintal for regular ‘grade A’ paddy in the current kharif marketing season, Pusa-1509 is even now being sold at Rs 1,200 levels. This, despite state agencies already procuring over six lakh tonnes (lt) of the latter variety.

This year, farmers in Punjab have planted around 28 lakh hectares (lh) under paddy, which includes 7.63 lh under basmati and the balance under non-basmati varieties such as PR-124 and Pusa-44. The state expects to produce 35 lt of basmati paddy this time — six lt of 1509 and 29 lt of 1121 — which is lower than the 40 lt during 2014. Paddy yields are around 20 quintals per acre for Pusa-1121, while 25 quintals for 1509 and 30 quintal-plus for parmal varieties.

“It is the state government that has encouraged us to dedicate more area to basmati, since these consume less water compared to normal parmal paddy. Isn’t its responsibility, then, to ensure a proper market for it?,” questioned Ajit Singh, a farmer from Gurdaspur.

The vice chairman of the Punjab Mandi Board, Ravinder Singh Cheema, admitted to The Indian Express that farmers were facing huge losses in basmati cultivation and even if the state government was procuring Pusa-1509 at the MSP for parmal paddy, it wouldn’t cover the total production cost. He demanded that the state fix higher MSP for basmati varieties and its agencies procure the same at this rate from farmers.

Meanwhile, rice millers and exporters claim they, too, are facing a crisis from declining overseas purchases. Ashok Sethi, president, Punjab Rice Exporters’ Association said that millers have sought a special package that includes interest subvention on bank loans and export advances.

Sethi pointed out that basmati exports to Iran in particular has fallen from 14-15 lt annually to 10-11 lt, following the imposition of economic sanctions by western powers last year. But even after the lifting of the sanctions this year, there has been no pick-up. Besides, the government in Iran has been imposing various restrictions, including discontinuing with the earlier open permit system for rice imports. The Islamic republic has been issuing permits, if at all, to only select big importers, who, in turn, are buying rice from other countries too, Sethi added.

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