Govt. urged to buy paddy and auction it to exporters following Taiwan model of implementing MSP
Export of rice from Telangana has a natural disadvantage of connectivity or rather lack of it — connectivity of water way — compared to several other paddy-growing States in the country and “it’s making a big difference in a bulk commodity business like rice which is a low-margin export,” the Federation of Telangana Chambers of Commerce and Industry has felt.
In a report prepared on ‘Rice Exports from Telangana – Opportunities and Way Forward’ submitted to Vice-Chairman of the Telangana State Planning Board B. Vinod Kumar here on Wednesday, the Chambers, however, suggested that rice exports from Telangana could be made more viable with supportive measures. Stating that Telangana is a landlocked State and the transport charges for shipment from the nearest port are costing high to the exporters, the report suggested that the State could bat for CONCOR (container corporation) subsidy scheme, which is extended to a few dry ports in the country. However, the subsidy is not extended to the inland container depot (ICD) at Sanathnagar.
Underscoring the fact that price competitiveness is key to export marketing, the trade and industry body felt that the CONCOR subsidy scheme should be extended to Telangana too and “the State government must take it up with Railways for the same”.
Further, the report suggested that there is every need to establish ICDs in Nizamabad and Karimnagar districts, both of which are over 150 km away from Hyderabad, emerging as major rice belts and the two ICDs at Sanathnagar and at Thimmapur in Mahabubnagar districts are far away from the rice belts.
Stating that international markets are agnostic for a product such as rice and always go by the landed cost, the report pointed out that all the rice exporters have been unanimously contending that implementation of minimum support price (MSP) has been adding to distortion of the paddy market with artificial increase in the price of paddy. Besides, new areas growing paddy within the country such as Chattisgarh, Odisha, Jharkand, West Bengal, Bihar and Uttar Pradesh have added to high price variation amongst States.
“Unless the price disadvantage is addressed, low procurement of rice by exporters cannot increase,” the FTCCI report said. It has strongly suggested to give subsidy to rice exporters to make the price on a par with other States.
The Federation of Telangana Chambers of Commerce and Industry asked the State government to address the price variation by following Taiwan model in implementing MSP, wherein the government would buy paddy and auctions it to exporters to buy at market price. “The system will reduce the burden on market variations but also clears the inventories,” the report noted.