India increases crop prices
Published on: June 20, 2024.
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India Increases Government-Mandated Price for Summer-Sown Crops, Including Rice
India has raised the government-mandated price for summer-sown crops, including rice, soybean, and cotton, in an effort to appeal to farmers ahead of key state elections later this year. The country establishes support prices for over a dozen crops annually as a benchmark. However, this increase may have an impact on government finances and potentially raise food inflation.
As part of the price raise, India has increased the purchase price for new-season common rice paddy by 5.4% to 2,300 rupees ($27.57) per 100 kg. This decision followed a cabinet meeting chaired by Prime Minister Narendra Modi, according to the country’s information minister, Ashwini Vaishnaw. The goal is to incentivize farmers to increase their production, especially considering that India is the world’s second-largest rice producer. Additionally, a higher yield could potentially lead to a relaxation of the ban on certain rice exports. India is currently the largest rice exporter globally.
B.V. Krishna Rao, president of the Rice Exporters Association of India, mentioned that the increase in the paddy buying price is a reflection of rising production costs. However, this may also lead to Indian rice becoming more expensive for international buyers. To address this potential issue, Rao suggested that the government consider reducing the export duty from 20% to 15%.
It is worth noting that India implemented a 20% export duty on parboiled rice and banned the export of white rice last year. These measures aim to build stockpiles for the country’s significant food welfare program, which provides free grains to those in need.
Source: [Brecorder](https://www.brecorder.com)
