New Delhi/ Chandigarh: Constituents of the Congress-led United Progressive Alliance (UPA) scrambled Friday to contain political fallout from the Centre’s decision to fix a minimum support price, or MSP, for paddy that fell short of a key panel’s recommendation.
At the same time, experts cautioned that the lower-than-expected price could thwart procurement by the government and encourage private traders to mop up a higher percentage of the rice produce than in the previous years.
Farm factor: A paddy field in Punjab. The Centre’s decision has invited flak from both UPA constituents and opposition parties
Tamil Nadu, ruled by a Dravida Munnetra Kazhagam-led coalition, announced that it would pay the state’s farmers Rs1,000 a quintal (100 kg) for the common variety of paddy and Rs1,050 a quintal for the fine variety. Chief minister M. Karunanidhi said the decision would encourage farm productivity and ensure food security.
The UPA government at the Centre had fixed the minimum support price at Rs850 a quintal, triggering a political storm after it emerged that the Commission for Agriculture Costs and Prices had recommended a higher price of Rs.1,000 a quintal.
Private traders had bought 29% and 28% of the total paddy procurement in Punjab in 2003-04 and 2004-05, respectively, when the increases in the MSP were just Rs20 a quintal and Rs10 a quintal. The volume dwindled in the subsequent years to around 15% when the increase was higher. This year, private traders could increase their share once again, experts said.
Shakeel Ahmad, a spokesperson for the Congress, sought to distance the party from the decision. “The Congress also wants the MSP of paddy to be Rs1,000. I don’t know why the finance minister said what he said,” Ahmad said. The cabinet committee on economic affairs “will probably increase the MSP later.”
Other constituents of the ruling UPA, including the Lalu Prasad-led Rashtriya Janata Dal, or RJD, also hoped the Centre would announce higher prices.
Politicians and experts also warned that the Centre’s move could endanger food security. Sukhbir Singh Badal, president of Punjab’s ruling Shiromani Akali Dal, said: “The need of the hour is to come up with some incentives for the farming sector to ensure food security.”
S. Raghuraman, head of research at the think-tank Agriwatch, said farmers may have to shift from rice to oilseeds and maize.
“However, that is not an attractive option either due to the lack of price assurance in those crops.” he added.
Krishnamurthy Ramasubbu and Sangeeta Singh and PTI contributed to this story.