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usm-red.gif (836 bytes)Prise Rise, What Next...
Price Rise..and now what is coming on rice front.

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Opinion and analysis by Senior Parliamentarian


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  After the great onion crisis, it may be the turn of paddy or for that matter rice. Now paddy is being harvested in Punjab, but reports of a pre-diwali unseasonal rains say of considerable loss of production.. The Akali-BJP Government in the State has ordered its procurement agencies to be liberal in purchasing paddy from the mandis. Damaged as it is, such paddy when milled will give a smaller quantity of rice, the percentage of broken rice will be higher and discolouration of around 5 percent of rice is forecast. The inevitable result that will follow is that the States will refuse to buy this substandard rice from the Food Corporation of India, the Government of India Agency. The pro-kulak Akali Dal-BJP Government is alleged to have come to the aid of the powerful foodgrains lobby and the exporters promising them all incentives for purchasing rice from the mandis and then milling it. The exporters who are now a pampered lot, will not only purchase a large quantity of rice but will also buy the best quality. The shortfall in rice production coupled with Government of India’s policy for export of foodgrains will inevitably result in rise in price of rice Since Punjab supplies a large quantity of rice to the Central pool States will not only be faced with a supply crunch but the open-market price will start shooting up as the Government of India will do little to curb the activities of the hoarders and profiteers.Production loss of paddy is estimated at one million tonnes. In a shortage situation, the traders will definitely offer Rs. 470 a quintal-the minimum support price for the higher variety. Through a clandestine understanding the procurement agencies will meekly buy the lower grade paddy the MSP of which has been fixed at rs.450 a quintal.

There is no gainsaying that the beneficiaries of the lethargy of the procurement agencies are the grain trades who have by now cornered a large stock of paddy which will be stored or milled during the lean season when price in a scarcity situation will soar allowing large profit to the traders who are nothing but hoarders.

Unfortunately, the Janata Dal ,Prime Minister, I.K.Gujral. too kept the Prakash Singh Badal Government in good humour allowing relaxation of rice specification last year. Gujral had to contest the Lok Sabha elction from Jullundher of course with the support of the Akali Dal.This year too, the Union Agriculture Minister, S.S.Barnala has given an order permitting farmers to offer paddy damaged upto 8 percent to the procurement agencies. Punjab Government has also exempted the exporters, who are nothing but large mill owners from the levy of rice.

Both the Centre and the Akali-BJP Government in Punjab, despite occasional feuds over excluding one area from the proposed State of Uttaranchal is perfectly having bonhomie, with the Centre offering to Punjab as much concession as the latter demands.

The imbroglio over the rice situation in Punjab is being dealt with in detail because the country’s rice eating States like West Bengal, the States of the North East ,Kerala, Tamil Nadu are largely dependent on the FCI which makes most of its procurement of rice in Punjab.

It is of course necessary for the States not to entirely depend on the FCI for supply of rice. Like West Bengal these rice eating States will have to deploy their own State agencies for procurement of rice.

Already there has been an alarming price rise of vegetables including potato and onions. It may be the turn of rice as the hoarders are now in the field trying to corner as much rice as they can. They have been aided by the bounty of the Central Government which has amended the Essential Commodities Act making it virtually toothless. The amendment has made the State Governments’ task difficult in dealing with the hoarders . The enforcement wing of the State Government will look on helplessly as no action could be taken against hoarding and black marketing in rice,.. Mr. Jyoti Basu’s letter to the Prime Minister Atal Behari Vajpayee urging him to take a policy decision for supply of fourteen essential items to the common people through the public distribution system has not evoked any response from Delhi so far..….  

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