Basmati fetches low prices, growers allege cartelisation

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Old 02-Nov-2015
Post Basmati fetches low prices, growers allege cartelisation

After cotton farmers, basmati growers in Punjab and Haryana are in for a shock as popular aromatic rice varieties like PUSA 1121 are fetching “far lower” prices than what they got last season.
While growers accuse rice exporters of indulging in cartelisation for distress sales, exporters blame weak global demand and oversupply for the “basmati crisis”.
Disappointed with “low” prices for their crop, farmer unions have now decided to launch an agitation against the government which encouraged growers to switch over to premium varieties but failed to ensure profitable prices.
Popular basmati variety PUSA 1121, which has started arriving in mandis of Punjab and Haryana, is priced in the range of Rs 1,300 to 1,800 per quintal against Rs 3,000 per quintal last season, traders said.
Similarly, another variety PUSA 1509 is hovering around Rs 1,200-1,300 per quintal. However, after the intervention of Punjab and Haryana governments, this variety is now being purchased at MSP rate.
“First cotton farmers faced heavy losses because of crop damage. Now rice farmers are in problem as they are unable to get good price for their crop which they had sown under the crop diversification programme. They are feeling cheated by the state government,” Bhartiya Kisan Union (Ugrahan) general secretary Sukhdev Kokri said today.
Kokri said 12 outfits, including four farm labour organsiations, would launch a three-day sit-in starting November 4 at Moga and Amritsar, which are in the basmati growing belts of Punjab. “We demand Rs 5,000 per quintal for PUSA 1121 and Rs 4,500 per quintal for PUSA 1509 variety,” Kokri said.
Rice growers accused exporters of making “high profits” by way of forming a “cartel”, thereby forcing them to sell crop at lower rates.
“If prices of basmati paddy have come down from 40 per kg to Rs 18 per kg then why retail price of basmati rice could not drop in the same way? Consumers are still purchasing basmati rice at same rate of Rs 80-100 per kg,” said Puneet Singh Thind, convener of Rashtriya Kisan Sangathan.
With basmati not turning out to be profitable, farmers will again switch to water-consuming normal varieties of paddy which at least ensures minimum support price.
“With the kind of rates farmers are getting for their basmati crop, they will stop growing it and shift to ordinary varieties,” said an official of Punjab Agriculture Department in Amritsar.
Amritsar district is one of the leading producers of basmati. Out of the total area of 1.80 lakh hectares under paddy in Amritsar, basmati was sown on 1.36 lakh hectares this year. Rice exporters ascribed low rate of basmati to weak global demand and heavy inventory of crop.
“There is weak demand for basmati in overseas markets at present. For example, Iran has not yet started placing orders. Basmati market in countries like Iraq and Yemen has shrunk which also led to dip in demand for Indian basmati,” said Kohinoor Foods Joint MD Gurnam Arora.
“Heavy inventory is lying with exporters,” Arora said, adding that prices of all commodities in international markets were down. Total basmati area in Punjab and Haryana is about 8 lakh hectares and 6 lakh hectares, respectively.

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