Chandigarh June 30:
Has Punjab been pushing itself deep in debt to keep its farmers afloat? Or is it paddy cultivation alone that has been pushing the state into a socio-economic crisis?
An appeal by Chief Minister Parkash Singh Badal to residents to bear with the tough measures taken by the government to tide over the state’s severest power crisis, coupled with Finance Minister Manpreet Singh Badal’s assertion that it was costing Rs 250 crore a week to sustain paddy cultivation appear to provide the answers. This expenditure is in addition to the free electricity and water supplied to the farm sector. Subsidies in whatever form come from the state exchequer.
Punjab’s economic prosperity is directly dependent upon the financial security that central foodgrain procurement operations provide to the state’s farmers. In 2008-09, for example, the total value of the principal foodgrains, paddy and wheat, procured by the state agencies amounted to Rs 21,337 crore, of which the share of paddy was Rs 10,625 crore and a bonus of Rs 604 crore was paid.
In 2007-08 the total value of foodgrains procured from the state was Rs 14,097 crore. This included Rs 8,165 crore on paddy procurement with an additional payment of Rs 1,266 crore as bonus. The share of wheat was Rs 5,933 crore which was subsequently supplemented by a bonus payment of Rs 791 crore. Can either the central or state government provide an alternative to farmers to desist from paddy cultivation and enjoy that type of financial security from their farmlands? The issue has been debated at different forums for a number of years without any conclusive or acceptable results.
The state, its residents in general and farmers in particular, have been losers in what is called the national food security project. Investigations reveal it is not only the people who have to bear the brunt of power crises, but business, industry, trade and other sectors too suffer heavy losses. Not many know to what extent the state exchequer runs up losses in procurement returns without any reimbursements from the central government.
to the state’s farmers. In 2008-09, for example, the total value of the principal foodgrains, paddy and wheat, procured by the state agencies amounted to Rs 21,337 crore, of which the share of paddy was Rs 10,625 crore and a bonus of Rs 604 crore was paid. In 2007-08 the total value of foodgrains procured from the state was Rs 14,097 crore. This included Rs 8,165 crore on paddy procurement with an additional payment of Rs 1,266 crore as bonus. The share of wheat was Rs 5,933 crore which was subsequently supplemented by a bonus payment of Rs 791 crore.
Can either the central or state government provide an alternative to farmers to desist from paddy cultivation and enjoy that type of financial security from their farmlands? The issue has been debated at different forums for a number of years without any conclusive or acceptable results. The state, its residents in general and farmers in particular, have been losers in what is called the national food security project.
Investigations reveal it is not only the people who have to bear the brunt of power crises, but business, industry, trade and other sectors too suffer heavy losses. Not many know to what extent the state exchequer runs up losses in procurement returns without any reimbursements from the central government. As of today central agencies, including the Food Corporation of India, owe the state government over Rs 8,000 crore as costs of procurement, transportation and storage of foodgrains procured on their behalf.
Till now the state was not getting reimbursed for transporting foodgrains from grain markets to storage centres. All that it was getting was Rs 15 a quintal on shelling of paddy. “The cost of transportation from market to storage place was not being reimbursed. Even the central government’s standing committee rejected our demand till we explained that shelling charges cover only transportation from place to storage to the mill and its subsequently delivery.
The committee has now accepted this demand and we hope to be reimbursed Rs 1,500 crore on this account only,” said a senior Food & Supplies Department official. Similarly, the expenditure borne by the state on transporting foodgrains from the grain market to a place of storage beyond 8 km is another issue that still needs to be resolved. Another area where the state had been suffering losses was the central government’s refusal to pay administrative charges for procurement operations.
“Basically, it’s the state machinery that conducts 80 to 90 per cent of procurement operations. Only in 2003 they started paying us 2.5 per cent of the total cost of procurement of the wheat crop. Nothing was paid for the paddy. Though we wanted administrative charges for both, the central government agreed to pay us 2.5 per cent of the total paddy procurement from this year. The quantum of paddy operations are certainly much bigger than those of wheat,” the official added.
Under these two heads only, Punjab had a financial liability of Rs 8,000 crore on which it had been paying interest, a source said. This excluded the subsidy component for power and water to the agricultural sector.
Has Punjab been pushing itself deep in debt to keep its farmers afloat? Or is it paddy cultivation alone that has been pushing the state into a socio-economic crisis?
An appeal by Chief Minister Parkash Singh Badal to residents to bear with the tough measures taken by the government to tide over the state’s severest power crisis, coupled with Finance Minister Manpreet Singh Badal’s assertion that it was costing Rs 250 crore a week to sustain paddy cultivation appear to provide the answers. This expenditure is in addition to the free electricity and water supplied to the farm sector. Subsidies in whatever form come from the state exchequer.
Punjab’s economic prosperity is directly dependent upon the financial security that central foodgrain procurement operations provide to the state’s farmers. In 2008-09, for example, the total value of the principal foodgrains, paddy and wheat, procured by the state agencies amounted to Rs 21,337 crore, of which the share of paddy was Rs 10,625 crore and a bonus of Rs 604 crore was paid.
In 2007-08 the total value of foodgrains procured from the state was Rs 14,097 crore. This included Rs 8,165 crore on paddy procurement with an additional payment of Rs 1,266 crore as bonus. The share of wheat was Rs 5,933 crore which was subsequently supplemented by a bonus payment of Rs 791 crore. Can either the central or state government provide an alternative to farmers to desist from paddy cultivation and enjoy that type of financial security from their farmlands? The issue has been debated at different forums for a number of years without any conclusive or acceptable results.
The state, its residents in general and farmers in particular, have been losers in what is called the national food security project. Investigations reveal it is not only the people who have to bear the brunt of power crises, but business, industry, trade and other sectors too suffer heavy losses. Not many know to what extent the state exchequer runs up losses in procurement returns without any reimbursements from the central government.
to the state’s farmers. In 2008-09, for example, the total value of the principal foodgrains, paddy and wheat, procured by the state agencies amounted to Rs 21,337 crore, of which the share of paddy was Rs 10,625 crore and a bonus of Rs 604 crore was paid. In 2007-08 the total value of foodgrains procured from the state was Rs 14,097 crore. This included Rs 8,165 crore on paddy procurement with an additional payment of Rs 1,266 crore as bonus. The share of wheat was Rs 5,933 crore which was subsequently supplemented by a bonus payment of Rs 791 crore.
Can either the central or state government provide an alternative to farmers to desist from paddy cultivation and enjoy that type of financial security from their farmlands? The issue has been debated at different forums for a number of years without any conclusive or acceptable results. The state, its residents in general and farmers in particular, have been losers in what is called the national food security project.
Investigations reveal it is not only the people who have to bear the brunt of power crises, but business, industry, trade and other sectors too suffer heavy losses. Not many know to what extent the state exchequer runs up losses in procurement returns without any reimbursements from the central government. As of today central agencies, including the Food Corporation of India, owe the state government over Rs 8,000 crore as costs of procurement, transportation and storage of foodgrains procured on their behalf.
Till now the state was not getting reimbursed for transporting foodgrains from grain markets to storage centres. All that it was getting was Rs 15 a quintal on shelling of paddy. “The cost of transportation from market to storage place was not being reimbursed. Even the central government’s standing committee rejected our demand till we explained that shelling charges cover only transportation from place to storage to the mill and its subsequently delivery.
The committee has now accepted this demand and we hope to be reimbursed Rs 1,500 crore on this account only,” said a senior Food & Supplies Department official. Similarly, the expenditure borne by the state on transporting foodgrains from the grain market to a place of storage beyond 8 km is another issue that still needs to be resolved. Another area where the state had been suffering losses was the central government’s refusal to pay administrative charges for procurement operations.
“Basically, it’s the state machinery that conducts 80 to 90 per cent of procurement operations. Only in 2003 they started paying us 2.5 per cent of the total cost of procurement of the wheat crop. Nothing was paid for the paddy. Though we wanted administrative charges for both, the central government agreed to pay us 2.5 per cent of the total paddy procurement from this year. The quantum of paddy operations are certainly much bigger than those of wheat,” the official added.
Under these two heads only, Punjab had a financial liability of Rs 8,000 crore on which it had been paying interest, a source said. This excluded the subsidy component for power and water to the agricultural sector.
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