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Does India Need A Better Rice Procurement Process?

According to at least one grain trade analyst in India, the answer to that question is “Yes.” As reported by Oryza, analyst Tejinder Narang recently wrote in the Hindu Business Line that reformation of the current paddy rice procurement process is necessary for several reasons.

“[U]nder the current system, the Food Corporation of India (FCI) and other government agencies procure paddy from farmers at minimum support price (MSP) and get this paddy milled from registered millers under Custom Milling of Rice (CMR) agreement,” the news source reported about Narang’s claims.

The system is leading to increased stocks with the millers, according to Narang.

One suggestion from Narangis that the FCI create a revised CMR, one that makes millers responsible to procure paddy from farmers at MSP. Additionally, the FCI and other state procurement agencies could procure a predetermined amount of milled rice from milled as a prescribed price based on the MSP of paddy.

Narang has also spoken on India’s wheat procurement process, and what changes the government needs to make to ensure that process runs smoothly.

“Over 18 million tonne wheat will be required under various social welfare schemes apart from 7 million tonne as buffer stock,” Narang explained to the Economic Times. “So, we still have additional 17 million tonne wheat. [The] government should offload stock in open market to further bring down prices in retail.”

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