Rs 50/quintal bonus for rice farmers

Prime Minister Manmohan Singh has agreed to agriculture minister Sharad Pawar’s proposal to pay a bonus...

Prime Minister Manmohan Singh has agreed to agriculture minister Sharad Pawar’s proposal to pay a bonus of Rs 50 per quintal to rice farmers to ensure paddy procurement of 270 lakh tonnes for the 2007-08 marketing season.

On Thursday night, Pawar advocated for giving the incentive on grounds that unlike wheat, which could be imported, rice procurement had to be done from within the country. Any shortfall in building stocks could not be made good from elsewhere.

Market arrivals have been low ever since purchase operations for paddy started on September 26. As of today, the procurement was 18 lakh tonnes compared with 25 lakh on the same date last year.

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Pawar’s argument was that there was no reason to await further trend in supplies since the bonus, when announced later, would be applicable from the retrospective date.

Moreover, the bonus — in excess of the minimum support price of Rs 675 a quintal announced for grade A variety and Rs 645 for common variety — would help reduce the yawning difference between MSP of rice and wheat, he argued. Rice producing states have protested of discrimination between paddy growers and wheat farmers and are asking for a bonus of Rs 75 per quintal to bridge the growing MSP gap. The difference has increased from Rs 50 per quintal in 2004-05 to Rs 200 for the 2006-07 paddy crop.

Sources said that the commission for agricultural costs and prices had favoured the states’ demand but it was shot down by the finance ministry.

PM has asked Pawar to bring the proposal before the Cabinet Committee on Economic Affairs next week to ensure that there is no further delay in announcing the bonus.