Gujarat does it again; ranks first in terms of least distortion for paddy

New Delhi  June 28, 2013 Last Updated at 18:08 IST

Gujarat, a marginal contributor to India’s overall annual rice production, tops the list of states having least distorted rice markets in the country, according to the first ever ranking of states on the basis of degree of market distortion for rice done by the Commission for Agriculture Costs and Prices (CACP).

 

Interestingly, the top rice producing states in the country like Chhattisgarh, Punjab, Haryana, Odisha, Andhra Pradesh, Uttar Pradesh have the most distorted market for the same. 

 

Chhattisgarh, which has emerged as one of the biggest producers of paddy in India, is ranked the lowest among the 18 states in the country where rice is mainly grown during the kharif season. In 2011-12, Chhattisgarh produced almost 6 million tonnes of rice, out of the total annual production of 104 million tonnes. 

 

“Interestingly the eight states with most distorted markets with respect to paddy and rice procured about 62 percent of total marketed surplus of rice in 2011-12. Thus, the magnitude of distortion in the rice and paddy markets is clearly evident,” CACP said in its report.  

 

The ranking was part of its kharif price policy recommendations made by the Commission for 2013-14. The cabinet Thursday accepted the Commissions recommendations to increase MSP of paddy by Rs 60 per quintal for 2013-14.

 

West Bengal, which is the country’s biggest producer of rice, was placed in the middle and was ranked 9th in the overall list. Gujarat produced around 2 million tonnes of paddy in 2011-12.

 

Explaining  the rationale, the Commission said that degree of market distortion for rice has been calculated on the basis of taxes/levies on rice as percentage of MSP, bonus on paddy announced by the state governments, rice procurement as percentage share in rice production, stock limits (on paddy and rice), levy rice and market reforms undertaken by the state government.

 

The Commission in its recommendations advised the state governments to get their markets right and bring back the focus on establishing a single barrier free market, with minimum controls.

 

“State governments need to facilitate setting up adequate infrastructure such as storage facilities by the private sector, milling capacities; they also need to be discouraged from embarking on a high procurement mission, as it discourages private sector participation. State should come only as a last resort where the markets fail, and not take over the functioning of markets as a first step,” the Commission said.

States having least distorted paddy markets in India
States	Rank
Gujarat	1
Assam	2
Himachal Pradesh	3
Bihar	4
Kerala	5
Tamil Nadu	6
Karnataka	7
Maharashtra	8
West Bengal	9
Jharkhand	10
Uttarakhand	11
Madhya Pradesh	12
Uttar Pradesh	13
Odisha	14
Haryana	15
Punjab	16
Andhra Pradesh	17
Chattisgarh	18
Source: CACP

Source: http://www.business-standard.com/article/markets/gujarat-does-it-again-ranks-first-in-terms-of-least-distortion-for-paddy-113062800745_1.html