Payment to farmers held up again - Central Government yet to clear last installment of cash credit limit

Thursday, 27/11/2014

http://www.tribuneindia.com/2014/20141127/punjab.htm#2

Chandigarh : Payments to thousands of farmers in lieu of the paddy procured are held up as the Centre has yet to clear the last installment of of the cash credit limit totalling Rs 3,000 crore.

A senior official said the Union Finance Ministry had been approached to accord sanction to the last installment. Earlier, the Centre had approved the release of Rs 18,451 crore in two installments. The state Food and Supplies Minister Adesh Partap Singh Kairon had to struggle hard to get these installments released.

“Our earlier target was to procure 126 lakh tonnes of paddy. We have now revised our target to 113 lakh tonnes. We have made payment to farmers for 92 per cent of the paddy procured through commission agents and other channels. To clear the pending payment, we are waiting for the Centre to release the third installment,” an official of the Food and Supplies Department said.

Based on the initial estimates (to procure 126 lakh tonnes), the Punjab Government had got a cash credit limit of Rs 23,248 crore. The limit has now been curtailed by Rs 2,000 crore. The Secretary, Food and Supplies, DS Grewal, said: “We have learnt that the Union Finance Ministry and the Union Civil Supplies Ministry have discussed the issue and the last installment is likely to be released soon.”

Meanwhile, paddy procurement has almost come to a close. The arrival of paddy has come down to a few thousand tonnes. Most of the procurement centres have been closed. Compared to last year’s figure of 127 lakh tonnes, 117.27 lakh tonnes of paddy has been procured by government agencies and private traders so far. Of this, 1.90 lakh tonnes have been procured by private traders, 2.85 lakh tonnes by the FCI and the remaining by state government agencies. Till the end of the season in a few days, the figure is likely to touch 118 lakh tonnes.

The fall in arrivals this year is attributed to the area under paddy shrinking by 3.5 lakh hectares with the crop being replaced by basmati. Already, about 30 lakh tonnes of basmati has arrived in various markets whereas last year the total arrivals were 20.09 lakh tonnes. The increase in the production of basmati proves that the farmers are turning to high-value crops, abandoning the ordinary varieties. The area under basmati this year has gone up from 5 lakh hectares to 8.5 lakh hectares and the area under ordinary varieties has declined to 19 lakh hectares from 22.5 lakh hectares last year.

However, the farmers have got a lesser price for basmati. The maximum price that basmati fetched last year was Rs 6,500 per quintal. This year it was Rs 3,350 per quintal. The minimum rate for basmati remained at Rs 1,750, almost on a par with the rate last year.

Paddy arrivals fall

Paddy procurement has almost come to a close in the state

The arrival of paddy has fallen to a few thousand tonnes

Most procurement centres have been closed

117.27 lakh tonnes of paddy has been procured so far this year

Last year this figure was 127 lakh tonnes

1.90 lakh tonnes have been procured by private traders, 2.85 lakh tonnes by the FCI and the rest by state agencies

This figure is expected to touch 118 lakh tonnes