Decline in acreage: Rice prices to soar further

June 2007
By Syed Akbar
Hyderabad, June 22: Prices of rice in the open market are likely to soar further with the decline in the paddy acreage in the State.
The State government, as part of its commitment given to World Bank, has been discouraging paddy cultivation resulting in the overall decline of paddy production and shrinkage in the cultivated area. This, in turn, has led to a spurt in the prices of rice in the open market with the superfine variety commanding Rs 25 a kg, up by Rs 5 over last year's.
The economy variety of rice was sold for not less than Rs 12 a kg in the harvest season in January and it is now available for Rs 17. The standard variety now commands a price tag of anything upward of Rs 19 a kg.
The overall production of paddy did not cross the 120 lakh tonnes mark in the last 10 years. Though the State has the potential to yield more production, State government's discouraging policies towards paddy farmers is leading to fall in production year after year. The acreage under paddy came down to 38.95 lakh hectares in 2006-2007 from 39.82 lakh hectares during 2005-2006. The target fixed by the government for 2007-2008 is 36.11 lakh hectares, which means a fall of about four lakh hectares.
With the shrinkage in the acreage, paddy production also recorded a downward trend, falling from 117.04 lakh tonnes in 2005-2006 to 115.82 lakh tonnes in 2006-2007. It is likely to fall further during 2007-2008, upsetting the rice prices in the consumer market.
According to official statistics, the growth rate in food grains production is not commensurate with the growth rate of population. While population in the State has been growing at the rate of 1.9 per cent, food grains production is going up only by 1.3 per cent. But paddy is recording a downward trend since 2000.
AP Ryothu Sangh senior leader S Malla Reddy blames the downfall in production of paddy to "deliberate" attempts by the State government to wean away paddy growers to commercial crops. "The government is creating artificial scarcity of seeds and discouraging farmers under minor irrigation, tail-end areas and well irrigation from taking up paddy cultivation. Already this has led to a steep hike in the prices of rice in the open market. We are going to witness further hikes unless the original paddy acreage is restored," he points out.