With rice procurement during the current marketing season (beginning October) remaining low as compared to that last year, the Union Cabinet is likely to decide to give an incentive bonus of Rs 50 over and above the minimum support price (MSP) in its meeting tomorrow. If okayed, it would expedite the procurement process for maintaining a comfortable buffer stock, especially considering that the Centre has targeted ensuring a rice stock of 294 lakh tonnes this year.

The food ministry’s proposal to this effect to be taken up by the Cabinet Committee on Economic Affairs comes amid rice procurement tumbling to 73.70 lakh tonnes as on October 28, against 75.05 lakh tonnes in the same period last year. This has galvanised the ministry to seek an incentive bonus for paddy procured for the central pool to Rs 50 over and above the current MSP. The Centre on August 20 had announced the paddy MSP at Rs 950 a quintal for average quality rice and Rs 980 a quintal for higher grade for the 2009-10 season (October- September).

In 2008-09, the government procured paddy at Rs 900 a quintal for fair average quality rice and at Rs 930 for higher grade, while the country had managed to produce 99.15 million tonnes of rice in 2008-09.

Also tomorrow, the Cabinet is expected to discuss amendments to the Essential Commodities Act 1955 and the Sugarcane Control Order 1966, which will enable it to fix the benchmark sugarcane price for the 2009-10 season.

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