The Tribune, Chandigarh, India

Friday, September 8, 2000,
Chandigarh, India

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Paddy purchase from Sept 21
Tribune News Service

CHANDIGARH, Sept 7 — Government agencies, including the Food Corporation of India, will procure paddy with 18 per cent moisture content from September 21, the Union Minister for Consumer Affairs and Public Distribution, Mr Shanta Kumar, announced at a meet-the-press programme here today.

Mr Shanta Kumar said that the decision was taken after his meetings with the Chief Ministers of both Punjab and Haryana during the past 24 hours.

He said that though the Centre would continue to impress upon the Punjab Government the need for procuring levy quota rice rather than paddy, the share of the government agencies in paddy procurement would be decided through negotiations between the FCI and the Chief Secretary of Punjab.

“It would be the same if not more than what it was last year,” he said maintaining that the Union Government would insist that Punjab revert to its earlier policy of supplying rice rather than paddy to the central pool. This policy changed after 1988 when 98 per cent of the share of the state came in the shape of levy rice. Last time it dropped to 23 per cent, he added.

Mr Shanta Kumar said that during the past two years, the quality of Punjab rice had deteriorated and most of the states were reluctant to accept it for their public distribution systems.

Refuting the “misgivings”, both among the public and in the media, that the ministry had adopted an indifferent attitude towards Punjab and Haryana and that it might not procure any paddy this time, Mr Shanta Kumar said the nation could never forget the contribution of Punjabi farmers in making the country self-sufficient in food grains.

The Union Government, he said, procured kharif crops worth Rs 10,000 crore from Punjab alone out of a total procurement of Rs 25,000 crore.

The Union Government was paying Rs 900 crore as taxes on food procurement to the Punjab Government annually besides dishing out another Rs 600 crore to other state agencies as handling charges for the procurement of foodgrains. In addition, the FCI paid Rs 220 crore per annum as commission on procurement.

Besides, his ministry had, on a request from Punjab, announced relaxation in standards for paddy procurement from 16 per cent to 18 per cent. This relaxation would continue this year also.

He also said that since both Punjab and Haryana wanted the procurement season to be advanced to September 15, the ministry had agreed to start its operations on September 21.

Last year, the procurement started on September 22.

Mr Shanta Kumar said the country was overflowing with foodgrains. A major problem facing the government was its stocks of 422 lakh tonnes, 180 lakh tonnes in excess of the buffer stocks. The government was losing stored foodgrains worth Rs 400 crore annually. After five years, the stocks would rise to 670 lakh tonnes.

The stocks of foodgrains were worth Rs 33,000 crore, including Rs 14,000 crore for stocks exceeding the buffer stocks.

The irony, he said, was that while the country was overflowing with foodgrains, a substantial portion of the population was still not able to get two square meals a day. As such, the ministry was coming out with a couple of proposals, including food for work for Greening India and other projects.

Under Greening India, 33 per cent of the area had to be brought under green or forest cover where, instead of paying wages to workers, the government would give foodgrains.

Another proposal was to give extremely poor persons wheat at Rs 2 a kg and rice at Rs 3 a kg through the existing public distribution system. At present, the government was giving a subsidy of Rs 10,000 crore per annum on the PDS to benefit 33 crore people, he added.

Another proposal to give each Member of the Lok Sabha 10,000 tonnes of foodgrains every year for distribution among extremely poor and needy persons in their constituencies was under consideration, he added. In this way, nearly 70 lakh tonnes of foodgrains would be utilised.

The possibility of the export of foodgrains was limited, he said, maintaining that because of good production of sugar, 10 lakh tonnes of the commodity would be exported this year by the mills themselves. He gave an assurance that the government was keeping an eye on the sugar price.

Mr Shanta Kumar said the Expenditure Reforms Commission of the RBI had recommended that the minimum support price should be frozen and replaced by a permanent procurement price.

He also advocated the abolition of all taxes on foodgrain procurement.

Mr Shanta Kumar said that because of the imposition of duty on wheat, sugar and rice, their imports had been almost banned. Similarly, duty had been increased on oilseeds. Unfortunately, the production of oilseeds had come down while that of rice and wheat had gone up.

Talking about future plans, he said the grain and food procurement policies had to change because of globalisation, liberalisation and the coming in of information technology.

Mr Shanta Kumar announced that as far as the storage of foodgrains was concerned, the storage had been granted infrastructure development status under the new policy where funding would be available to the private sector to construct godowns at predecided places for the FCI and other government agencies.

Talking about the owners of private godowns in Punjab, Haryana and other areas, Mr Shanta Kumar said that their cases were being discussed and would be settled soon as 85 of 165 owners had already entered into new agreements with the FCI.

Earlier, Mr Jagtar Singh Sidhu, president of the club, presented him with a memento on behalf of the club.