Explained: How Punjab mandis procure more paddy than state produces; UP-Bihar link to this

A grain market in Ludhiana. Government agencies bought 163.82 lakh tonnes of paddy in Punjab mandis in 2019-20. (Photo by Gurmeet Singh)

For the past few years, mandis in Punjab have been procuring at Minimum Support Price (MSP) more paddy (non-Basmati) than the state produces. This is because a large amount of paddy from Uttar Pradesh and Bihar is illegally brought to Punjab, to be sold at the higher price it would fetch in the mandis here.

Several cases have been registered in the recent past, including during the current procurement season, against this practice. The government’s action generally ends at confiscating some trucks, carrying a few thousand tonnes of paddy, and registering some cases.

The illegal trade, however, is of far more than a few thousand tonnes of paddy. If the total production and total purchase of paddy in Punjab in the past three years are taken into account, the figure of illegally sold paddy arrived at is in millions of tonnes. How? The Indian Express explains.

How much paddy was purchased by the government in these years?

Almost all the crop brought to mandis by the farmers is purchased by the government. In Punjab, government agencies bought 163.82 lakh tonnes (LT), 170.46 LT and 179.56 LT paddy in 2019-20, 2018-19 and 2017-18 respectively, as per data from the Food Corporation of India (FCI), which purchases it for the central pool.

How much area was under paddy cultivation in Punjab in these three years?

Punjab agriculture department’s records show that 22.91 lakh hectares were under paddy cultivation in 2019-20, 25.94 lakh hectares in 2018-19 and 25.19 lakh hectares in 2017-18.

What was the average paddy yield of the state?

According to the state agriculture department, the total average yield of paddy in Punjab was recorded at 6,635 kg (6.6 tonnes) per hectare in 2019-20, 6,532 kg (6.5 tonnes) in 2018-19 and 6,516 kg (6.5 tonnes) in 2017-18.

What should be the total production of paddy in Punjab in this period?

As per the crop cutting experiments across Punjab by the state agriculture department, the total production should be 152 Lakh tonnes (15.2 million tonnes) in 2019-20, 169.44 LTs (16.9 Million tonnes) 2018-19 and 164.14 LTs (16.4 million tonnes) in 2017-18. Thus, in all the three years, government agencies purchased more paddy than Punjab’s total production, as per the average yield.

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Experts said that even if we take 1% or 2% more than the actual average yield (though the government’s estimates are more or less equal to the actual), the amount of the paddy coming to mandis is still much higher.

Moreover, farmers don’t bring their entire crop to mandis –– they keep some for self-consumption and for seeds.

A senior officer in the Food Corporation of India (FCI) said: “Even if they keep 2-3 million tonnes of the crop for self- consumption, one can well imagine how much extra paddy is being transported to Punjab, from Bihar and UP.”

Difference in total production and total purchase

In 2019-20, 11.82 lakh tonnes (1.2 million tonnes) more paddy was sold in Punjab’s mandis than produced in the state. In 2018-19, the figure around 1.02 lakh tonnes, and in 2017-18, it was nearly 15.42 lakh tonnes (1.5 million tonnes).

“If the amount of paddy Punjab farmers consumed themselves is also factored in, the transportation from other states is not less than 4-5 million tonnes (40 to 50 lakh tonnes) every year,” said a senior officer in the state agriculture department.

Who is getting this profit?

In UP and Bihar, paddy is hardly procured by the government, and is sold much below the MSP to traders.

According to officials, several rice millers and a large number of rice exporters, with the connivance of some procurement agencies officials, are involved in the Punjab racket.

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They get paddy in UP and Bihar at the rate of Rs 900 to Rs 1,200 per quintal, depending upon quality. Adding milling and transportation charges, it costs them around Rs 1,200 to Rs 1,500 per quintal. In Punjab, they sell at a far higher rate of the MSP, Rs 1,888 per quintal, illegally in the name of state’s farmers.

An official said traders sitting in Delhi are controlling the markets of UP and Bihar and facilitating the millers of Punjab. And such millers in Punjab are earning Rs 400 to 600 per quintal by selling the paddy to the government.

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