Decision on subsidised ‘Bharat rice’ soon
The government is likely to take a call on a plan to sell rice at subsidised prices in the retail markets from its surplus stock within a week, sources said.
Currently, the scope of the “Bharat rice’ initiative including pricing and pack sizes for retails sales is being discussed. The plan is designed to cool the retail prices of mass consumption rice varieties, which have remained stubbornly high despite curbs on certain exports and open market sales by the Food Corporation of India.
Trade sources are however skeptical about the efficacy of subsidised sales by the government.
At present, the government is selling chana dal and atta (flour) at subsidised rates of Rs 60/kg and Rs 27.5/kg through farmers’ cooperative Nafed and NCCF and Kendriya Bhandars stores under Bharat Dal and Bharat Atta initiatives.
A food ministry said that the domestic prices of rice are at elevated levels despite a record output, ample stocks with FCI in the pipeline and various restrictions and duties imposed on grain exports.
There has been a lukewarm response to open market sale of surplus rice to bulk buyers by the Food Corporation of India (FCI) at subsidised rate of Rs 2900/quintal, below the economic cost of grain for 2022-23 at Rs 3,537/quintal. Since July, 2023 FCI could sell only 0.15 million tonne (MT) of rice through weekly e-auctions so far against an allocation of 5 MT for the current year.
Retail rice prices rose by 12.33% in December and rice prices are at an elevated level since October 2022. This is despite the government’s attempt to sell surplus rice in the open market from the FCI stock.
“Let me examine the issue of the increase in rice prices and will initiate appropriate measures to address it,” Food minister Piyush Goyal had stated on Saturday.
The government has banned exports of white rice and imposed 20% export duties on par-boiled rice last year to improve domestic supplies.
However, to meet the food security needs for developing countries, the government is providing rice on request. Goyal stated that India has provided rice to countries like Indonesia, Senegal, and Gambia recently.
Meanwhile, Goyal on Sunday stated that the FCI’s open market sale scheme has proved to be an effective tool in moderating the prices of essential commodities like wheat and rice.
“Bharat Atta, Bharat Dal, interventions regarding Onion and Tomato have assisted Government of India in price stabilization,” Goyal said at 60th foundation function of FCI.
He urged the FCI to adopt technology and digitisation to improve operational efficiency. “We should adopt technology and digitisation to improve operational efficiency and the amount we are spending, how we can control expenditure and reduce it,” Goyal said.
He suggested the cost of operation of FCI could be reduced through route optimisation, mechanised loading and unloading and the adoption of a modern storage system. Goyal suggested hosting a hackathon to generate ideas in these areas.
FCI annually handles more than 70 million tonne of rice and wheat. Out of food expenditure of around Rs 2 trillion in the current fiscal, Rs 1.37 trillion is routed through FCI.
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