Telangana: Paddy purchase throws up big challenges

Hyderabad: Though the announcement that the state government would procure paddy at minimum support price of Rs 1,960 a quintal and that it would deposit the money in the accounts of the farmers directly had brought cheer to the farming community, the fund-starved administration is faced with several challenges like non-availability of godowns to keep the raw rice.

The government has to mobilise nearly Rs 10,000 crore to be paid as MSP in a month's time. The normal practice is that the Telangana State Civil Supplies Corporation would seek loans from the banks with the government guarantee to buy paddy from farmers. After handing over raw rice to the FCI (Food Corporation of India), the Centre would reimburse the entire money spent on procurement, processing, gunny bags and transportation of raw rice to the godowns.

But following the slugfest between the Centre and the state on paddy procurement, the Civil Supplies Corporation has not gone in for loans. It may now go in for bank borrowings. But then it cannot expect any money from the Centre till the FCI lifts raw rice. How much it would lift and how much money would be reimbursed is still not clear since the government had not entered into MoU with the Centre before the beginning of the rabi season.

According to estimation by officials, nearly 60 lakh tonnes of paddy would hit the market during rabi season and the total requirement of funds will be more than Rs 10,000 for the entire process.

Another major challenge before the government is to stock the raw rice in godowns. Currently, more than 50 per cent of the godowns in the state are full with raw rice procured during the last season as it had not been handed over by the state to FCI. The total storage capacity of the warehouses owned by the FCI, State Warehousing Corporation and private warehouses was 15.55 lakh metric tonnes. The stock position in the godowns was more than 50 per cent.

Once the new rice stocks start arriving it would put great pressure on godowns, unless the government makes some alternative arrangements for proper storage, the rice may get damaged if there were unseasonal rains. Normally during May some unseasonal rains are experienced in the state.

Meanwhile, Minister for Civil Supplies Gangula Kamalakar said on Wednesday that the government would write a letter to the Centre to lift the raw rice once the paddy procurement was over. He said the district administration has been instructed to identify suitable locations to stock paddy and raw rice.