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May 2024

Rice prices are touching the sky. What measures is the government taking to bring them down?

The prices of rice in the country are increasing with every passing day. What could be the reasons? Let’s break down the matter.

Rice prices are touching the sky. What measures is the government taking to bring them down?

Recently, the Indian government made it compulsory for all wholesalers, retailers, and traders to announce their rice stocks. Moreover, the launch of “Bharat rice” is also announced by the government in order to cut down the prices of rice in the market. 

The production

As far as the production of rice is concerned, India produced 135 million tons in the year 2022-2023. This was a significant high, a high of over 62.84 lakh tons, than the previous year’s production. However, it is important to note that some states have suffered a significant drop in the production of paddy. These southern states are also the ones that are the major rice consuming states of the country. It is expected that in the state of Tamil Nadu, the production of paddy may decline by about 30 percent. Additionally, in Karnataka, the production of rice may decline by a 25 percent, as claimed by famers and traders. This, however, is not the case in the northern parts of the country, where there is an increase in rice production by 15 percent. As per the Union government, the Food Corporation of India has ample stocks. 

The prices of rice

There has been an increase in the retail price of rice by about 14.51 percent in the previous one year. In the last month, the prices of Basmati rice have dropped by about 15 percent. However, in the southern states, the price of paddy is high. Between November 2022, and November 2023, the prices of a few varieties of rice have seen an increase by Rs. 10 per kg or even more. There exists over 430 varieties of rice produced in India. 

Measures taken by the government

The traders, retailers, wholesalers, and millers were instructed by the government to report the stocks online. The categories were that of basmati rice, paddy, broken rice, par boiled rice, and non-basmati white rice. The government has also brought forward the retail sale of “Bharat Ric” to the general consumers at the price of Rs. 29 per kg. Additionally, in the year 2022, the export of broken rice was banned in the country. Additionally, a 20 percent duty was imposed on the par-boiled rice. Additionally, non-basmati white rice exports was also dragged under the category of prohibited category from July 2023. During the present Kharif marketing season, the government was able to procure over 600 lakh tons of paddy. The season began from October 1, 2023. Till the end of the first month of 2024, the government was able to sell 1.66 lakh tons of rice in the open market.

The reason behind the increase in prices

There are several reasons for which the price of rice is increasing, as cited by traders and millers. In the last five years, the Minimum Support Price for rice has increased. The cost of storage and transport has also increased in the last few years. Moreover, the states of India that significantly consume rice, there has been a drop in the production of rice this year. Moreover, there has been significant export of non-basmati rice in the last three years in comparison to the export of the previous years. Additionally, the rice that is consumed in the retail market is actually of the last season’s stock. There is a shortfall in the arrivals, and this may increase the prices of riced in the coming month. QR Code

Published Date: February 12, 2024

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