Rising tension over falling rice supply

Besides price parity, Pawar’s argument for extra bonus is based on the fact that there is a risk of paddy procurement failing to touch the target for 2007-08 kharif marketing season. Though the goal is to garner 276 lakh tonnes, 25 lakh tonnes more than last year, the data for November 4 shows that arrivals were 116.75 lakh tonnes compared to 124.85 lakh tonnes a year ago.

The hunt for rice for the Targeted Public Distribution System has become more arduous for Pawar as the supply from Punjab and Haryana—the two states that contribute 70 per cent of the stock building—is almost over. Both have given three lakh tonnes less even though first advance estimates show rice production in the country was unchanged at 801.5 lakh tonnes.

With Chidambaram declining to shell out the extra bonus as it would cost the government Rs 2,090 crore more, Pawar’s recipe for the CCEA is to raise the minimum support price and partially mitigate the extra subsidy burden by raising the central issue price for above poverty line (APL) households at minimum support price, plus the two incentive bonuses of Rs 50 each.

Sources said that the issue price for APL, unchanged since July 2002, has been proposed at Rs 930 per quintal so that the differential between issue price and market price does not climb to 100 per cent, leading to leakages from the TPDS. However, this did not find favour with the GoM members, they said.

On October 9, the CCEA had declared Rs 50 per quintal bonus over and above the minimum support price of Rs 645 per quintal on common and Rs 675 on grade ‘A’ paddy, even though the Department of Agriculture and Cooperation had suggested that “at this stage, a bonus of Rs 75-100 would be reasonable”.

Besides procurement, the issue has assumed political tones, with the Opposition BJP as well as the Central ministers from the rice-growing states demanding minimum support price parity for rice with wheat at Rs 1,000 a quintal.