Paddy procurement 8212; Row between FCI, Punjab continues

The Consumer Affairs Ministry headed by Shanta Kumar estimates that if the demand of the Akali Dal government in Punjab is accepted, it would cause a loss a loss of at least Rs 300 crore to the FCI. The minister, therefore, put his foot down and refused to concede the demands. Consequently, an agitated Punjab Chief Minister Parkash Singh Badal met Prime Minister Atal Behari Vajpayee last night to complain against the Consumer Affairs ministry8217;s 8220;anti-farmer, anti-rice mill and anti-Punjab attitude.8221;

What transpired between Badal and Vajpayee is not immediately known. But the PM is reported to have called Shanta Kumar for discussion on the issue.

Shanta Kumar8217;s argument is that the FCI is already facing acute storage in view of a record stock of 420 lakh tonnes of food grains as on August 31 this year. This includes 250 lakh tonnes of rice.

The FCI is in the process of making arrangements for fresh stock-piling of about 80 lakh tonnes of paddy and needs extra time to find space for this. Therefore, advancing of procurement date is not possible, the Union Minister feels.

Badal also wants to bully the Centre by insisting that the FCI agree to a moisture content of 18 per cent in the procured paddy instead of the 16 per cent fixed this year.

But Shanta Kumar has rejected this demand too. He told Badal yesterday that moisture content in paddy had been brought down to 16 per cent after obtaining the opinion of experts and conformed to global standards. The FCI, according to estimates, would lose Rs 100 crore if the moisture content is accepted at 18 per cent.

Secondly, the FCI is not ready to advance the date of procurement by a month as this too will cause heavy losses to the exchequer while rice mill owners would stand to gain a few hundred crores of rupees.

It was argued during the meeting that the Centre had already enhanced the procurement price of paddy by Rs 20 a quintal. If the procurement date is advanced, the traders and mill owners would make a killing as they would sell old paddy at the revised rates.

The FCI had also has informaion that new arrivals in the mandis markets has not begun so far. Secondly, if the Punjab Government was keen to purchase the paddy from its own quota, it was free to do so.

However, Badal was upset with Shanta Kumar8217;s stand and went to the Prime Minister to register a complaint. He said that the Centre8217;s delayed decision would put the farmers at a disadvantage and they would fall into the hands of brokers.

He also cited the stand taken by rice millers of Punjab that they will not purchase paddy from the mandis unless procurement specifications are relaxed, along with an assurance that the FCI would buy the entire stock of milled rice from them.

Badal said that 3000-odd rice millers in the state are also upset over the Union Government8217;s insistence for levy rice procurement alone, reversing the existing Custom Milled Rice CMR system, without promising any relaxation to the millers. Under the CMR system, the Central and state agencies make direct purchases from the mandis and then get these custom milled rice from mills before procuring the levy rice at the rate of 75 per cent of the total stock.

Shanta Kumar8217;s argument is that if the CMR system was followed, it would cost the FCI an extra Rs 160 crore a year and again, it will be the millers who gain. The minister, sources say, also conveyed to the PMO that except for Punjab and Haryana, the FCI never purchased paddy in other states. The paddy is bought by mills directly from farmers and then rice is sold to the FCI. There have been numerous instances in the past where millers bungled in milling the paddy and even giving adequate percentage of rice in lieu of the paddy procured.