In what has been termed a policy shift, the government is planning to purchase Boro rice directly from farmers this season to help ensure a fair price for the latter and boost its own stock. A FE report says the cabinet division has recommended that the food ministry take necessary steps to this effect. The move comes against the backdrop of an unprecedented fall in rice stock of the state silos. The stock is now estimated at 0.39 million tonnes against a minimum comfortable stock of 1.2 million tonnes.
Clearly, this came from the lesson learnt from the past year's experience of procurement--- an utter failure. The International Food Policy Research Institute (IFPRI) in a recent research study has suggested direct procurement of both rice and paddy from farmers. Food ministry data, as of April 07, showed rice stock declined to just 0.39 million tonnes which is less than half the stock maintained during this period last year. According to reports the food directorate needs a minimum of 0.6 million tonnes of rice until June 2021 for its safety-net programmes.
It was last year's poor procurement that is now starkly visible in the current stock position. In the last Boro season, the government could meet only 47 per cent of its targeted procurement while it was only 12 per cent in the immediate past Aman season. It was due to higher prices in the open market than that offered by the government. It was learnt from news reports quoting food department officials that farmers were reluctant to sell to the government and were interested in selling their produce in the market as prices there were higher. Also, there was another problem for public warehouses to procure paddy from farmers as the government's procurement specifications did not allow buying paddy having moisture content beyond a certain level--- 14 per cent.
In view of what happened last year, one has reasons to believe that the authorities did not do their homework before planning the procurement drive. Clearly, there was deficient monitoring of market prices or speculative prices of paddy before setting the procurement price. As regards moisture content, it is pretty well known that farmers do not bother to dry their paddy sufficiently enough to match government's specifications for procurement. All they are interested in is fair price--- wherever available. Experts opine that the main reason was faulty price tag that discouraged farmers to sell to the government. There were suggestions from concerned quarters, including the media to revise the procurement price in keeping with the market prices, and although, reportedly, there was a move to do so, it did not happen so. Because of the low price offered by the government, millers also did not come forward to sell to the government. The authorities should have understood the fallout in the current season, and there is no reason not to, but they stood by their stand which must not have been the case, especially in the Covid-induced circumstances.
Now, the stock position is threatening to assume the shape of the most undesirable--- food insecurity. The government having no other recourse to quickly replenish the current stock has initiated to import rice. The cabinet committee on economic affairs and purchase approved a number of proposals in the past three months to import a total of 1.55 million tonnes of rice under government-to-government (G-to-G) arrangement and through international tenders. Last month (March), the government approved three proposals to import a total of 0.35 million tonnes of rice from India, Thailand and Vietnam under state-to-state arrangements. The purchase committee then approved two more proposals with each involving the import of 50,000 tonnes of rice. The procedural steps, mostly bureaucratic, will take time, maybe an inordinately long time--- as past experience shows. Although the government is saying that the purchase will be on G-to-G basis, it is basically purchase from one or more of the state trading agencies of the selling countries which being semi-independent entities go by their own procedures and rules. Meanwhile the government has allowed private traders to import rice, which, hopefully, will take far shorter time.
Amid the Covid-induced adversities in most sectors of the economy, food security does figure as a major concern given the requirement of massive quantities of rice under the subsidised open market sale (OMS), gratuitous relief operations for the poor and low-income population across the country. Replenishment of stock has thus become crucially important. All-out efforts must be in place to ensure that the procurement does take place as planned. While fixing price should be a major factor to ease the procurement drive, related issues such as oversight and close monitoring should also fall in line to fulfil the procurement target.