Bonus to paddy farmers to cost Odisha Rs 6000 crore annually

financialexpress.com:

To fulfill its election promise of a 42% bonus over the minimum support price (MSP) to paddy farmers, the new government in Odisha has to make budgteray provision in excess of Rs 6000 crore per annum, given the curent level of procurement in the state, official sources said.

The largesse will also require the food ministry to give an exemption to the Odisha government for procurement of surplus paddy above what is needed for the central pool, as done for Chhattisgarh in the ongoing procurement season – 2023-24 (October-September). The sources indicated that ministry is not quite inclined to accord this waiver, as it will inflate the economic cost of grains due to the higher storage and transport costs. A rise in economic cost of grains handled for the Natioinal Food Security Act will result in higher food subsidy.

The BJP in its manifesto for Odisha promised to buy paddy at Rs 3,100/quintal, against the MSP of Rs 2,183/quintal for the current procurement season under the proposed Samrudh Krushak Niti. The MSP for the 2024-25 season is likely to be revised upward shortly and agencies have purchased 6.39 million tonne (MT) of paddy in the state in the ongoing season.

The centre bears the MSP payment to farmers while bonus is paid from the state government’s budget.

Under the Kirshak Unnati Yojana launched in March, Chhattisgarh paid a bonus amounting to Rs 13,320 crore or a differential of Rs 917/quintal over MSP to 2.4 million paddy farmers last year. The bonus is provided as an input assistance of Rs 19,257/acre to farmers, which aims to enhance their income, crop production, and productivity while reducing cultivation costs.

Chhattisgarh and Odisha have a share of 16% and 9% respectively in the total paddy purchase of