Kerala Finalises Deal with AP to Procure Premium Quality Parboiled Rice

Kerala has reached an agreement with Andhra Pradesh to source parboiled rice and five other essential food items at reasonable prices. As part of this, the Andhra Pradesh Civil Supplies Corporation will purchase 3,840 tonnes of premium quality "Jaya" rice directly from farmers each month at the MSP and transport it by train to Thiruvananthapuram, Kollam, Ernakulam, Thrissur, and Kannur.

This was decided at a meeting earlier this week in Thiruvananthapuram between Andhra Pradesh Food Minister KP Nageswara Rao and his counterpart GR Anil. "We will ensure MSP for farmers in our state and good quality rice for Kerala consumers," the Andhra Pradesh minister stated.

A high-level delegation is in Kerala at the invitation of the Pinarayi Vijayan government to discuss the possibility of growing the popular "Jaya Bondalu" variety. "It's a parboiled variety that keeps the grain strength. It is not consumed in our state. Our farmers stopped growing it after the Food Corporation of India stopped procuring the parboiled variety grown during the rabi season," as per a top official.

Farmers in East and West Godavari districts (undivided) grow this variety, which is known as Andhra Pradesh's rice bowl. "Because it is a popular variety in Kerala, they approached us about supplying at least one lakh tonnes of paddy. We need to discuss it with Chief Minister Jaganmohan Reddy and then with the Agriculture Ministry to figure out how to proceed," the official said.

The deal's finer points, such as the price to be paid and the timeframe for supplying paddy, have yet to be finalised. When asked if the farmers would receive additional incentives, the official stated that it was not yet clear. "We're waiting for the final result of the discussions," he said.

At the time of publication, the delegation was still in Kerala, holding talks with its counterparts. Andhra Pradesh will also supply Kerala with red chilli, Kashmiri chilli, coriander seeds, chickpea, and cowpea. The Vijayan government had switched to direct procurement and turned to Andhra Pradesh to eliminate the role of middlemen and bring foodgrain and grocery prices under control. This came after random surveys lauded the government for being the most effective inflationary control mechanism.

Prices had skyrocketed in the previous month, which was blamed on supply side blues exacerbated by standing crop damage caused by rain and flooding in the growing states. The retail price of "Jaya" rice had risen by 15 percent in the previous month. During the same time period, the price of the "Matta" variety increased by a similar margin.

Traders believe that the runaway prices will not settle until at least January of next year. Aside from lower production in Andhra Pradesh and Karnataka, they blame the 5% GST on packed rice. Although the season has begun in Karnataka, arrivals have been disappointing. The majority of mills in the state are operating on depleted stocks.

Kerala's internal production is sufficient to alter market dynamics. The State government buys and stores the majority of the rice produced locally. According to official statistics, the area under paddy cultivation and total yield fell dramatically between 2005 and 2020.

According to Agriculture Statistics 2005-2020, published by the Department of Economics and Statistics, the area under cultivation has decreased by 84,692 hectares (30.71%) and yield has decreased by 43,089 tonnes (6.84%). In 2005, there were 2.75 lakh hectares under cultivation; by 2020, there will be 1.91 lakh hectares. Total output fell from 6.30 lakh tonnes to 5.9 lakh tonnes.

According to P. Indira Devi, Emeritus Professor of Agricultural Economics at Kerala Agricultural University, higher productivity has resulted in a marginal increase in paddy production in the state. Productivity has increased to 3,105 kg per hectare. The majority of the seeds used are high-yielding varieties with a potential yield of 6,000-7,000 kg per hectare. Traditional paddy varieties, on the other hand, yielded 1,000-2,000 kg per hectare.

The rice demand in Kerala is estimated to be 38-40 lakh tonnes per year. However, local production can only meet 16% of demand, a marginal improvement from five years ago. Wetland paddy cultivation predominates in the State, which receives abundant rainfall half the year, she said, adding that the government has introduced a scheme in which landowners of cultivable paddy lands are paid Rs 3,000 per hectare as royalty for simply conserving it.