Paddy bonus of Rs 40-50 per quintal on cards

NEW DELHI: The Centre is mulling a bonus of Rs 40-50 per quintal for paddy procured in the forthcoming marketing season. The government purchases through the FCI are likely to be advanced by one week to September 25 compared to the normal date of October 1 each year.

A Cabinet note has yet to be circulated to concerned departments by the food ministry on the subject of bonus for paddy in 2007-08. Sources in the know said, that the bonus proposal is likely to be given the official nod next week along with the decision on wheat Minimum Support price which has been recommended at Rs 1000/qtl by the Commission on Agricultural Costs and Prices (CACP).

“We expect that the bonus will more likely be Rs 50 per qtl, also in response to political pressure,” a government official said. The Commission had itself not recommended any bonus for paddy earlier when the MSP for the farm year was pegged by the government at Rs 645/qtl (Common variety paddy). That spelt out a Rs 65/qtl hike over 06-07’s MSP of Rs 580 for the variety, but an additional bonus of Rs 40/qtl was later announced for procurement between October 1, 2006 and March 31, 2007.

For Grade A paddy, too, the MSP this year was pegged at Rs 65/qtl over the Rs 610 for 06-07 (+Rs 40/qtl bonus not counted) and the current year’s MSP stands at Rs 675/qtl. Earlier this week, food and farm minister Mr Sharad Pawar also asserted that the government was thinking on the lines of closing the wide gap in MSP between the two key staples, wheat and rice, primarily against the background of lower wheat buys in two consecutive years, thus impacting on food security and placing the burden heavier on rice.

Given this, the food ministry is loath to undermine, in a sense, even the National Food Security Mission (NFSM plans to boost paddy production by 10 m tonne by 2011-012) by letting the increasing differences in the support price for the two staples persist. In 05-06, the difference in actual MSP between wheat and rice was only Rs 80/qtl.

However, in 06-07, this went up to Rs 170/qtl. If the MSP for wheat is accepted at Rs 1000/qtl this year, the difference between support price for common grade paddy and wheat would be a significant Rs 355/qtl more.