M A I N   N E W S

Basmati glut sends prices, farmers’ dreams crashing
Ruchika M Khanna
Tribune News Service

Taraori/Karnal, November 20
The deep lines on his forehead have become more pronounced in the past month. As 75-year-old Prakash Chand, a resident of Bhaini Khurd village near Karnal, sits with his grandson Joginder in his fields to find a way of raising yet another loan, tears well up in his eyes.

“I am an old man and could die soon. My biggest regret is that instead of trying to reduce the debt burden for my children, I will be leaving behind a huge debt on them.

“With the price of basmati crashing this year, I have no option but to take yet another loan from the commission agent. Since I already have a loan from a bank through my kisan credit card and a tractor loan, I will have to rely on the commission agent to bail me out of my present financial crisis, even if I have to pay a higher rate of interest,” he said.

(Left) Farmers Prakash Chand, his grandson Joginder of Bhaini Khurd village; and Ishwar Singh from Manak Majra village narrate their woes. Tribune photos: Nitin Mittal

Prakash is just one of the hundreds of farmers in the basmati belt of Haryana who have been forced further into indebtedness with the prices of basmati crashing by almost 50 per cent this year. As a result of supply of basmati outstripping demand, the price has crashed from Rs 2,400 per quintal last year to Rs 1,500-Rs 1,700 per quintal (for PUSA 1121) now.

In case of a traditional basmati variety like CSR 30, the price has crashed from Rs 2,750 per quintal last year to just Rs 1,400-Rs 1,670 per quintal now.

Agriculturists said that prices have fallen to the levels as were prevalent 15 years ago.

With most basmati exporters having been left with a huge inventory from the previous cropping season and the slowdown in exports to Europe and the USA (because of complaints of pesticide residue), they are not buying the new crop in a big way.

But its not just that demand for basmati has dropped this year. Basmati production has increased manifold with the area under various basmati varieties in Haryana having gone up from 5 lakh hectares two years ago to 7.5 lakh hectares this year.

This sharp fall in prices has pushed farmers in this entire basmati belt, spread across the districts of Kurukshetra, Karnal and Panipat, towards indebtedness. Farmers here have been forced to postpone the marriages of their children, halt the renovation of their houses, and shelve any plans for modernisation of their farming operations through buying of new farm equipment.

Ishwar Singh, a farmer from Manak Majra village informed The Tribune that after he suffered a loss of Rs 1.3 lakh on the basmati crop grown on five acres, he had no option but to postpone the marriage of his daughter.

“I will still have to take a loan from a commission agent to buy seeds for the next wheat crop, DAP and urea - whose prices have almost doubled since last year,” he rued.

Harpreet Singh, a farmer from Beed Naraina village, too said that he was forced to put on hold his plans to buy a new tractor because of the heavy loss incurred by him on this year’s basmati crop.

With input cost per acre on basmati going up to Rs 45,000, farmers said that the returns per acre this year have just been Rs 22,000.

Parikshit, a farmer from Sultanpur village near Taraori, said that he had taken six acres on lease to sow PUSA 1121 and CSR 30, besides sowing it on five acres of his own.

“The lease for land has gone up to Rs 35,000 per acre. The input cost per acre (including seed, sowing, harvesting and fertiliser inputs) is Rs 10,000 per acre. With a high input cost of Rs 45,000 per acre, my return was just Rs 25,000 per acre as my crop (with a yield of 15 quintals per acre) sold for just Rs 1,500 per quintal (for PUSA 1121) and Rs 1,700 per quintal (for CSR 30).

“Hoping for high returns from this year’s crop because of a good yield, I had started construction of a new house for my family. But with prices crashing, I have stopped the work till the next rabi marketing season,” he said.

In surplus

• Basmati exporters had been left with a huge inventory - from the previous cropping season and due to the slowdown in exports to Europe and the USA because of complaints of pesticide residue
• The area under various basmati varieties in Haryana went up from 5 lakh hectares two years ago to 7.5 lakh hectares this year

Price crash

• The price for PUSA 1121 crashed from Rs 2,400 per quintal last year to Rs 1,500 - Rs 1,700 per quintal now
• For CSR 30, the price crashed from Rs 2,750 per quintal last year to just Rs 1,400 - Rs 1,670 per quintal at present

Losses mount

• While the input cost per acre has gone up to Rs 45,000, the returns per acre this year have just been Rs 22,000