Odisha government to compensate Seeds Corporation loss

The corporation had sustained a loss of Rs 30 crore of which Govt provided a Rs 7.5 crore subvention
Image for representational purpose only. (Photo | PTI)
Image for representational purpose only. (Photo | PTI)

BHUBANESWAR: The Odisha State Seeds Corporation (OSSC), which is under financial stress, has received an assurance from the State Government for compensation of its loss amounting to Rs 30 crore due to low off-take of certified paddy seeds in Kharif 2016.

The decision to compensate the loss of the State-owned corporation was taken at a recent meeting chaired by Agriculture Secretary Sourabh Garg, official sources said.Earlier, the Goverad partly compensated the loss by providing a subvention of Rs 7.5 crore and had assured to pay the balance amount of Rs 22.5 crore. But, the hopes of the Corporation came dashing down as there was no provision in the 2018-19 budget.The corporation sustained losses after implementation of direct benefit transfer (DBT) scheme when the sale of demands fell drastically.

After witnessing sharp fall in the seed replacement rate, the State Government had targeted to supply 6 lakh quintals of certified seeds to the farmers in Kharif 2016. It entrusted the job of seed procurement to OSSC which purchased about 5.5 lakh quintals of certified seeds from registered seed growing farmers. But, after implementation of DBT scheme there was a fall in demand for seeds.

Under the DBT scheme, farmers are required to pay the full cost of seeds and the subsidy amount would have been sent to their accounts. As a majority of farmers were not in a position to make upfront payments for certified seeds, they preferred to meet their seed demand from local markets, where the cost is much cheaper. As a result, the Corporation could sell only 2.5 lakh quintals due to poor response from farmers. It had to dispose of the balance stock of 3 lakh quintals in the open market at half the cost, sustaining a loss of about Rs 30 crore. Following repeated requests from the Corporation, State provided a subvention of Rs 7.5 crore and was to pay the balance of Rs 22.5 crore.

The OSSC, which has been sustaining losses every year in seed procurement, had also given a proposal to the State Government to provide an annual grant of Rs 5 crore for supply of quality seeds to farmers. The Government is yet to consider consider the proposal, sources said. While the DBT scheme has proved to be a dampener, this has adversely affected the seed replacement rate. The SRR in case of paddy has reached nearly 35 per cent prior to the implementation of DBT in 2005-16.

It was less than 15 per cent during Kharif 2017. At a loss, OSSC had purchased about 5.5 lakh quintals of certified seeds from registered seed growing farmers. It could sell only 2.5 lakh quintals and disposed of 3 lakh quintals in open market at half the cost. The government had partly compensated the loss by providing a subvention of Rs 7.5 crore.T he government assured to pay balance amount of Rs 22.5 crore. No provision in the Budget had left the Corporation at their wits end.

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