Paddy purchase turns into Centre-Badal tussle

Paddy purchase turns into Centre-Badal tussle
HARISH GUPTA

NEW DELHI, SEPT 3: The PMO appears keen to resolve the dispute between the Centre and the Punjab government regarding procurement of paddy in the state, before Prime Minister A.B. Vajpayee leaves for his 12-day US trip on September 7.

A tussle broke out between the two parties over the timing of procurement and the minimum moisture content as approved by the Food Corporation of India (FCI).

The Consumer Affairs Ministry headed by Shanta Kumar estimates that if the demand of the Akali Dal government in Punjab is accepted, the FCI stands to lose at least Rs 300 crore. The minister, therefore, refused to concede the demands. Consequently, an agitated Parkash Singh Badal met Vajpayee on Friday night to complain against the ministry's ``anti-farmer, anti-rice mill and anti-Punjab attitude''.

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

Shanta Kumar argues that the FCI is already facing acute storage problem in view of a record stock of 420 lakh tonnes of food grain as on August 31 this year. This includes 250 lakh tonnes of rice. The organisation is in the process of making arrangements for fresh stock-piling of about 80 lakh tonnes of paddy and needs time to find space for it. Therefore, advancing of procurement date is not possible, Kumar feels.

Badal insists 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.

Shanta Kumar has rejected this demand too. He told Badal on Friday that the lowered moisture content conforms to global standards and experts had been consulted on the same. The FCI, according to estimates, would lose Rs 100 crore if the moisture content is accepted at 18 per cent.

It is also 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.

The Punjab government 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 also has information that new arrivals in the mandis (markets) have 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.

Badal says that the Centre's delayed decision would put the farmers at a disadvantage. He says rice millers of Punjab 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 rice from them.

Badal says that 3000-odd rice millers in the state are also upset over the Union Government's insistence to 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 the custom milled rice from mills before procuring the levy rice at the rate of 75 per cent of the total stock.

Kumar's argument is that if the CMR system is followed, it would cost the FCI an extra Rs 160 crore a year and again, only millers will 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.