RAIPUR: A record procurement of over 92 lakh metric tonne (LMT) of paddy on the minimum support price (MSP) this year has apparently put the Congress-ruled Chhattisgarh government in a fix. The state cabinet on Thursday took a decision to auction 20.5 LMT of paddy, been cited as surplus.
The state government expressed "disappointment" and put the blame for such situation on the Centre, which restricted the rice procurement from Chhattisgarh to 24 LMT.
“We were given the initial assurance by the central government on 60 LMT to be procured for the Central pool during the current kharif marketing season. So the state went ahead procuring 92 LMT paddy”, said Ravindra Choubey, the state agriculture minister.
So far the Food Corporation of India (FCI) has got the Centre's approval to lift 24 LMT custom milling rice from the state.
The state government had repeatedly urged the Centre to increase the quantity from 24 LMT to 40 LMT but so far there has been no response.
“Under the given circumstances we are left with little option except to auction the surplus paddy in an open market”, said Amarjeet Bhagat, the state food minister.
However the opposition BJP cited that the Congress government is pursuing the faulty policy and trying to cover-up its failure by accusing the Centre.
“After the Bhupesh Baghel government couldn't facilitate the lifting of the approved 28 LMT custom milling rice by the FCI last year, how can the Centre now trust the state to raise the limit to 40 LMT? Auctioning now will surely be a severe loss-making flawed move and have a serious implication resulting into the poor fiscal health as the state’s debt owing to persistent loans is already rising substantially”, averred Dharamlal Kaushik, the leader of opposition.
The state food and civil supplies department officials informed that besides the 24 LMT custom milling rice to be taken by FCI, the public distribution system (PDS) will consume another 24 LMT rice.
“So, for 48 LMT rice around 71.50 LMT of paddy would be used up. About 20.5 LMT will remain as surplus (unallocated) to be sold through auction in an open market”, an official circular stated.
The Chhattisgarh State Cooperative Marketing Federation (MARKFED) that executes the work of paddy procurement under price support scheme, has opted National Commodity and Derivatives Exchange (NCDEX)—an online commodity exchange platform, as an agency to negotiate with the interested firms on auction.
The state government nurtured an apprehension on the possible spoilage of the additionally procured paddy, if not timely disposed of in the market.
The government has fixed the base rate of Rs 2035 per quintal for the bidders. The official notification further stated that the auction clearance rate could be higher or lower than the base price, implying that the state government that procured paddy on Rs 2500 per quintal is prepared to sell it at lower price in an open market.
“If there emerges any losses owing to the lower quoted price in the auction, even then its reasonably preferable option over the heavy losses likely when the surplus paddy get spoiled or damaged”, was the justification given by the state.