With the Central government increasing the minimum support price (MSP) for paddy varying from ₹180 to ₹200 per quintal, the State government may have to shell out at least 11% more towards procurement cost than the current year.
In respect of Grade ‘A’ variety of paddy, the rate of hike is 11.32% and in the case of common variety, it is 12.9%. Apart from the Centre’s MSP, the State government provides an incentive, ranging from ₹50 to ₹ 70 per quintal, for the two varieties. These rates of incentive are expected to continue this year too.
Going by the pattern in the paddy procurement by the Tamil Nadu Civil Supplies Corporation (TNCSC), the Grade ‘A’ variety ordinarily constitutes 70%, says a senior government official. During the current Kharif Marketing Season (KMS) [which began on October 1, 2017 and will end on September 30, 2018], the quantity of paddy procured up to May 31 was 11.54 lakh tonnes, of which 87% is of the Grade ‘A’ variety.
A senior official in the State Civil Supplies Department explained that at the time of procurement, the burden of payment has to be borne by the State government or its agency, which is the Tamil Nadu State Civil Supplies Corporation (TNCSC), in this given instance.
Subsidised rice
Even though the Centre does not absorb the cost of paddy procurement, its assistance comes in the form of the supply of subsidised rice. At present, the State gets, every month, about two lakh tonnes of rice at the rate of ₹3 per kg and a little less than one lakh tonnes at ₹8.3 per kg, when the provisional economic cost, as worked out by the Central authorities, is around ₹33 per kg. In effect, the State is getting Central subsidy, ranging from ₹30 to ₹25 per kg for rice.
For the purpose of calculation of monthly rice allotment for Tamil Nadu, the Centre adjusts the quantity of paddy procured by the TNCSC.