fall in FCI rice procurement over last three years, reveals government
Published on: December 7, 2023.
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Declining Rice Procurement by FCI: A Closer Look
According to data revealed in a Parliament reply, the procurement of kharif or summer-sown rice by the Food Corporation of India (FCI) has been steadily decreasing over the past three years. The FCI, which is responsible for stocking state-owned cereals for public distribution, purchases rice from farmers at the minimum support price. In the year 2020-21, when the Covid-19 pandemic struck, procurement reached its peak at 60.2 million tonnes, as disclosed by Sadhvi Niranjan Jyoti, the Minister of State for Food and Public Distribution, in response to a question from Congress MP Deepak Baij.
The government’s procurement of rice experienced a 5% decline in 2021-22, amounting to 57.5 million tonnes. The following year, in 2022-23, rice procurement further dropped to 56.8 million tonnes, witnessing a decrease of 1%. To combat high food inflation, India has implemented a ban on the export of rice and wheat, while also easing import duties on certain pulses.
Analyst Rahul Chouhan from IGrain Pvt Ltd suggests that one of the factors contributing to the lower procurement is that farmers have found it more profitable to sell to private buyers in recent years due to market prices exceeding the minimum support price. This trend also implies that the actual rice production might be lower than the official estimates.
For the year 2022-23, the government has established a minimum support price of ₹2,040 per quintal for the common variety of paddy, which is the price at which the FCI purchases rice from farmers.
Provisional official data indicates that the production of summer-grown rice in 2022-23 reached 108 million tonnes, slightly below the target of 112 million tonnes. In the previous year, 2021-22, the country produced 111 million tonnes of summer rice, while in 2020-21, the production stood at 104 million tonnes during the kharif season.
Impact of Lower Rice Procurement
The declining trend in rice procurement raises concerns about food security and the livelihoods of farmers. Additionally, it highlights the need for interventions to facilitate a fair and sustainable environment for farmers to sell their produce. The government must evaluate strategies to incentivize farmers to sell their crops to the FCI and ensure food security for the nation.
The Future of Rice Procurement
As the government aims to stabilize rice procurement and maintain food inflation within acceptable limits, it is essential to assess the current policies and explore innovative ways to support farmers. Balancing the interests of farmers, private buyers, and consumers will be crucial for the sustainable growth of the agricultural sector in India.
