The price of rice

Category: State Policies, Trade & Food Sovereignty

In view of the Union Government's recent decision to cut supply of rice to Kerala from the common central pool, the State Government needs to come up with ways to shore up domestic production.

 

K.G. Kumar

 

Few Keralites can go to bed contented without a bellyfull of their favourite dish of rice. Time was when there were over 600 varieties of locally grown paddy to choose from, as Kerala's senior citizens will tell you, but today the story is strikingly different.

Economists recall that there was a time when rice was the most important food crop of Kerala, accounting for about 28 per cent of the total cropped area and for more than 99 per cent of the production of cereals in the State.

How times have changed! According to the Kerala State Planning Board's Economic Review 2007, out of a gross cropped area of 29.18 lakh hectares in 2006-07, food crops, comprising rice, pulses, minor millets and tapioca occupy only 12.25 per cent.

Kerala's agricultural economy has been undergoing a structural transformation since the mid-1970s by switching over a large proportion of its traditional crop area, which was devoted to subsistence crops such as rice and tapioca, to more remunerative crops such as coconut and rubber, explains the Review.

The area under rice has declined from 2.76 lakh ha in 2005-06 to 2.64 lakh ha in 2006-07. In the 1960s, the area was close to 8 lakh ha. The average annual decline in area under rice during the Eighth Five Year Plan was around 22,000 ha, whereas it came down to an average of 13,000 ha during the Ninth Plan period.

With declining production and constant, if not increasing, demand for rice from consumers in Kerala, the State has no option but to depend on imports from neighbouring States – and the magnanimity of the Central Government in terms of allocation from the central pool.

Thus, it was a shock to learn of the recent move by the Centre to stop, until December, the supply of 17,056 tonnes of the APL (above poverty line) category rice. The State's original share was 1,13,420 tonnes a month, 85 per cent of which – amounting to 96,364 tonnes – was cut last April.

According to the Food and Civil Supplies Minister C. Divakaran, the Centre has said it is willing to 'consider' supply of 11,336 tonnes in the APL category from January 2009.

The Centre's decision to cut supply will have direct and negative consequences on the State's public distribution system, since as of now the State Government has just 3 lakh tonnes of rice in stock .

Even as foodgrain prices around the world remain at record heights, and several countries, including India, have banned the export of rice, the irony for Kerala is that demand for local varieties of rice is being buoyed up from abroad.

Recently, the expatriate organisation in the Middle East, the Indian Cultural and Arts Society (INCAS), called upon the Ministry of Overseas Indians Affairs to lift the ban on export of parboiled rice from India. Since January, when India imposed a ban on exports of all non-basmati varieties and selected varieties of basmati rice, the prices of rice in the Gulf region shot up sharply.

 

Expat concern

And from Down Under comes a similar entreaty. The Melbourne chapter of the World Malayalee Council in Australia called on the Prime Minister as well as leaders from Kerala to intervene to rectify the shortage in supply of Kerala varieties of rice to Australia. Around 30,000 Keralites live in Australia, many of them in Melbourne.

A report from the Indo-Asian News Service quoted an official of the Council as saying, "The price of 10 kg of 'Palakkadan Matta' variety of rice has shot up from A$11 to A$27 in the last few months.

Likewise, the price of 10 kg of 'atta' went up from A$10 to A$22. In the past few days we have been told there is no more stock of the rice that we Keralites usually use."

In the face of such steady demand for rice, what are the options available for Kerala to increase production? The answer is not quite blowing in the wind, for the State Government's official Economic Review offers a solution:

"The future of rice production in the State lies in improving productivity through the promotion of high-yielding varieties under scientific management in potential areas. Strengthening group farming units with the required facilities and gradually raising them to the level of self-supporting institutions is perhaps one way to circumvent these problems. However, past experience with the group farming programme suggests that neither input subsidies nor infrastructure support per se can bring about substantial change in area and production. Instead of pumping in more money by way of additional incentives, appropriate institutional arrangements for organising common services, coupled with participatory irrigation management, local water resources development, promotion of supplementary income sources, low-cost credit, organized marketing and selective mechanisation could improve the situation."

 

The writer can be contacted at kgkumar@gmail.com

04/08/2008

URL: www.thehindubusinessline.com/2008/08/04/stories/2008080451641500.htm

 

 

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