Mukesh Kumar, a farmer in Gaya district in Bihar, cultivates paddy on his two-acre land, besides running a small construction-material shop. Last year, when he visited Nizamabad in Telangana on work, he met a rice mill operator who agreed to buy paddy from him and from some other small farmers back home in Bihar.  

“The paddy which local traders in my state bought at nine hundred or thousand rupees per quintal, I managed to sell it to the traders in the south at nearly fourteen hundred rupees per quintal,” a pleased Mukesh Kumar told Gaon Connection.  It was the smoothest transaction he was ever involved in, he declared. “Their men came in November, weighed the produce, packed it and paid me in cash.  Here, even if our paddy gets sold at the mandi, the farmers are not paid for it promptly,” he said.

A large network of traders from the south come to Bihar looking for cheaper paddy which they get from the farmers here. The paddy farmers are happy to sell to these traders as the latter offer a much higher price than what the farmers would get within the state. As of 2019-20, Telangana procured 97 per cent  of the paddy, while in Bihar the state procured a meagre 20.37 per cent.

The traders Mukesh Kumar dealt with obviously think it is worth their while to travel the 1,300 kms from Nizamabad in Telangana to Gaya in Bihar, to procure the paddy. 

“A trader comes with at least three or four, twenty-two-tyre trucks that can hold 100 tonnes of paddy each. Meanwhile, I alert other small farmers to be ready with their produce. These traders come here during the Kharif season, fully equipped, with sacks, sewing machines, everything,” said Kumar who said he was happy to assume the role of a middleman and help out other cash-strapped farmers like himself.   

‘Rice’ in procurement

Currently, Telangana is the leading state in procurement of paddy at MSP (minimum support price), that is Rs. 1,888 per quintal for Grade A paddy and Rs. 1,868 per quintal for regular paddy. In 2019-20, the state procured  97 per cent of the 7.67 million tonnes of paddy the state produced –  a huge leap from 2016-17, when it procured 68 per cent of the produce. 

In contrast, in the same year 2019-20,  Bihar produced 6.58 million tonnes of paddy and only 20.37 per cent of that was procured by the state government.  

According to a news report the Telangana government procured 4.5 million tonnes of paddy from the state as of January 2021. And over and above this, it procured a further 1.4 million tonnes of paddy from other states.  

Farmers in Bihar struggle to get the state government to procure their paddy. In order to do that, they have to register online with the department of cooperatives. However, records show that the government procurement through primary agricultural credit societies (PACS) and trade boards, has been very little in the state.

The beleaguered paddy farmers in Bihar are therefore forced to sell their crops at a much lower price than the MSP, and traders from Telangana, Haryana and Punjab, as well as rice millers, are capitalising on this, and buying paddy from them and selling the paddy in their respective states. 

“I produced about hundred quintals of paddy in my six-acre land, and registered to sell it in the mandi but when I took it there, I was told the moisture in my paddy was more than seventeen per cent, and was turned back. So, I sold it to a trader for eleven hundred rupees a quintal and he in turn sold it in Punjab for nearly eighteen hundred a quintal,” Pankaj Kumar a farmer from Masarhi panchayat in Kaimur district, Bihar, told Gaon Connection.

In the financial year 2019-2020, more than four lakh farmers  in Bihar like Pankaj Kumar, had applied online for paddy procurement. As per a report by the ministry of consumer affairs, food and public distribution, only 2,79,402 farmers got the benefit of MSP in Kharif marketing year 2019-20 (up to 9 September 2020). The state lagged far behind Chhattisgarh and Haryana, where paddy was procured at MSP from 18,38,593 farmers and 18,91,622 farmers respectively, in the year 2019-20. 

Mills on the rise

In Telangana, the department of food, civil supplies and consumer protection procures paddy under the online purchase management system  (OPMS). “We have no objection to the paddy coming in from other states. The farmers of Maharashtra and Andhra Pradesh also come here to sell paddy,” T Santosh Kumar, divisional officer of OPMS, Karimpur district of Telangana, told Gaon Connection. The state procures other types of paddy for its mandis, that is not locally cultivated, but is of good quality, he explained. 

Telangana has also seen an increase in the number of rice mills. “Most of the workers in these mills are from Uttar Pradesh and Bihar. The millers go through them and buy paddy from these states because the farmers there do not get a good price,” Santosh Kumar pointed out. 

According to a media report, there are about 2,200 rice mills in Telangana at present, and the government is trying to increase their numbers. K Chandrashekhar Rao, chief minister of Telangana, has ordered the collectors in the districts to allocate land for the millers to set up more mills to process the paddy that is coming in from so many states. 

Again, in contrast, Bihar has been struggling with the issue of insufficient rice mills, that has also contributed to its abysmally low procurement of paddy. Due to a multi-crore scam, 2,000 out of 3,000 rice mills in the state were shut down a decade ago.

Now states like Telangana are benefitting from it. “The paddy of Bihar is cheaper. Many a time, we pound the entire stock of paddy but sometimes we even sell it at the government rate at the Mandi. We benefit either way,” Rahul Asati, owner of SK Rice Mill in Nizamabad district, Telangana, told Gaon Connection.

Meanwhile, woes continue to plague the paddy farmers of Bihar. Paddy procurement that was to go on till March 31, 2021, has been brought forward to January 31. As on January 25, according to data provided by the Bihar co-operative department, the procurement has been 1.96 million tonnes as against the target of 4.5 million tonnes.

“We will accomplish the procurement target that we have set,” Shambhu Sen, the registrar of cooperatives, Bihar, assured Gaon Connection. He said that if there was no procurement happening in parts of the state, it had to do with the quality of the yield. “Our government is fully committed to procure the entire produce of the farmers,” he stated.

Read the story in Hindi.

Also Read: MSP: How Telangana, Maharashtra and Madhya Pradesh increased procurement of paddy and wheat at MSP?

Also Read: More farmers in Telangana and Madhya Pradesh benefit from MSP than those in Punjab and Haryana