Telangana Govt Secures Loan worth Rs 15,000-crore for Paddy Procurement

The state government has secured a Rs 15,000-crore loan from four banks to pay farmers' MSPs (minimum support prices) for paddy procurement in the rabi season. TS Civil Supplies Corporation was able to secure the loan thanks to a bank guarantee from the state government.

Recently over 5,000 paddy procurement centres will open in all of the state's major villages, with paddy being purchased on a large scale starting on Friday. Depending on demand, the government plans to expand paddy procurement centres to 7,000 by May 10, and the entire paddy procurement process will be completed by June 15.

Within a week of procurement, the MSP of Rs 1,960 per quintal will be credited directly to farmers' accounts.

In rabi, the government expects to buy nearly 65 lakh tonnes of paddy. However, the government is expected to face severe godown space shortages because the Food Corporation of India (FCI) has yet to clear previous Kharif paddy stocks in districts.

Last year, the government stored paddy in private function halls and government schools, colleges, and other institutions that were closed due to Covid curbs, but this will no longer be possible with function halls and educational institutions operating at full capacity due to the lifting of Covid curbs.

The civil supplies minister, Gangula Kamalakar, told reporters on Wednesday that the Centre's refusal to buy paddy from Telangana in rabi will put the state government under a lot of financial strain. Regardless, the CM has chosen to shoulder this burden for the benefit of farmers.

"Both the Centre and state BJP leaders claim that they will buy raw rice rather than boiled rice. We are now prepared to serve you raw rice. Allow them to specify how much raw rice they will buy from Telangana in rabi. Everyone will know that the Centre and state BJP leaders have defrauded Telangana farmers again if they backtrack even after giving raw rice. In this regard, we are writing a letter to the Centre, and we will await their response," Kamalakar added.

In Telangana, usually boiled rice is produced in rice mills from paddy grown in the rabi season due to heat conditions prevailing in the state in summer. If raw rice is produced in rabi like in Kharif, broken rice will come out which FCI does not take.

In Kharif, for every quintal of rice (100 kgs), 65 kg of raw rice is produced but in rabi, only 32 kgs of raw rice is produced. To avoid this loss, millers opt for parboiled technology in rabi to produce 65 kgs of boiled rice.

Telangana's government has now agreed to cover the cost of producing raw rice in rabi. It will be interesting to see how the Centre reacts to the TS government's offer to supply raw rice even during rabi. Only if FCI purchases raw rice and reimburses the state government later could the government recoup some of its loans. If not, the government will be forced to auction the rice on the open market, potentially resulting in significant losses.