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RICE PRICES REGULATION

WHY IN NEWS?

  • Recently, Central government made it mandatory for all traders, wholesalers, retailers, and millers to declare their respective rice stocks.

STATUS OF PADDY PRODUCTION IN INDIA:

  • In the FY 2022-2023, India produced around 135 million tonnes of rice, which is 62.84 lakh tonnes higher than the last year.
  • Due to inadequate rainfall, the southern States, which are the major rice consuming States, are also said to have suffered a drop in paddy production.
  • As per the claim of traders and farmers, “In Tamil Nadu, the production may drop by almost 30% and in Karnataka, there is almost 25% decline.”
  • On the other hand, in north India the rice production is up by 15% in the north, trade sources say.
  • The Union government told that there are enough stocks with the FCI and that Kharif crop is good.
  • For Rabi crop, area under paddy cultivation as of February 2, is 39.29 lakh hectares compared to the 40.37 lakh hectares last year.

RICE PRICES IN INDIAN MARKET:

  • The retail prices of rice has increased by 14.51% in the last one year.
  • Though Basmati rice prices are said to have dropped 15% in the last one month, paddy prices are up in the southern States.
  • The prices of some varieties even increased by more than ₹10 per kg between November 2022 and November 2023.
  • Of nearly 430 varieties of rice produced in the country, the rice infation is high in the varieties that is largely preferred by consumers.
  • On the contrary, In States such as Tamil Nadu, farmers who have the capacity to hold stocks and sell to private traders, are expecting better prices this year.

CAUSES OF PRICE HIKES OF RICE:

  • The Rice traders and millers cite several reasons for the higher retail rice prices.
  • The main cause of rising cost is increasing Minimum Support Price for rice and the rising cost of transport, storage, etc.
  • In rice consuming States, the varieties which are consumed in large quantities have seen a drop in production this year.
  • Despite government measures, export of non-basmati rice has seen a multi-fold jump during the last three years compared to the previous years.
  • Non-basmati rice exports were 5.1 million tonnes in 2019-2020 which increased to 13.1 million tonnes in 2020-2021, 17.3 million tonnes in 2021-2022, and 16.1 million tonnes in 2022-2023.
  • The export duty levied by the government is neutralised by the high international prices.
  • Moreover, the rice consumed currently in the retail market is of the stock of last season and with a shortfall in arrivals, the prices may go up even more in the coming months.

MEASURES TAKEN TO CONTROL RICE PRICES:

  • As a part of major move, the government has asked traders, wholesalers, retailers, chain retailers and millers to report the stocks online in the categories of broken rice, non-basmati white rice, par-boiled rice, basmati rice, and paddy.
  • The government has also launched the retail sale of ‘Bharat Rice’ to general consumers at ₹29 per kg.
  • The export of broken rice was banned recently, and a 20% duty was imposed on par-boiled rice.
  • Since midst of 2023, Non-basmati white rice exports was also put under the prohibited category.

  • In order to control rising prices, government has procured 600 lakh tonnes of paddy during the current Kharif marketing season, starting October 1, 2023.
  • With this procurement, the central poo of rice has 525 lakh tonnes as against the annual requirement of almost 400 lakh tonnes for welfare schemes.

WAY FORWARD:

  • The government should prioritise sale for consumption because as per millers in the northern States, there is a demand for rice for consumption, ethanol production, and cattle feed.
  • The stock data collected by the government is expected to give an indication of the stock levels and the government should look at capturing data for the most consumed varieties too before deciding on the future course of action.

The post RICE PRICES REGULATION appeared first on Vajirao IAS.

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