Government Allows Retail Sale of Rice at Rs 29/KG

What’s in today’s article?

• Why in the News?
• Background
• India’s Rice Exports
• Union Government’s Intervention Measures

Why in the News?

• The Union government announced retail sale of rice at Rs 29 per kg under ‘Bharat Rice’ through three cooperatives.
• The move is aimed at controlling the rise in rice prices, which have risen by 14.5 per cent in retail and 15.5 per cent in the wholesale markets in the last one year.

Background of Retail Sale of Rice

• In 2023, the Union government, in order to check domestic rice prices and ensure domestic food security, had prohibited the export of white (non-basmati) rice and levied a 20% export duty on par-boiled rice.
• The government's decision to curb rice exports was prompted by escalating domestic prices and the desire to ensure adequate supply for the country.
• Most industry experts anticipate that the government will not ease restrictions before the general election, which is scheduled for April-May 2024.
• The fall in rice production during the 2023-24 kharif season, influenced by El Nino-induced dry weather conditions, further complicates the supply situation.
• Despite trade curbs, local rice prices have remained robust, leading the government to issue warnings to retailers.

India’s Rice Exports

• India is the largest rice exporter globally with a 45% share in the world rice market.
• Overall rice exports in April-May of 2023 were 21.1% higher compared with the same period last financial year.
  • In May 2023 itself, export of Basmati rice was 10.86% higher than its exports in May 2022.
• The shipment of non-Basmati rice has been on the rise for the last three years and the export of Basmati rice in 2022-2023 was higher than the previous year.
• The data shared by the government says that till August 17 this year, total rice exports (except broken rice) were 15% more at 7.3 million tonnes as against the 6.3 million tonnes during the corresponding period last year.
• Thailand expects nearly 25% lower production in 2023-2024; Myanmar has stopped raw rice exports; and it is said to be low in Iraq and Iran as well.

Union Government’s Intervention Measures

• Union Food Secretary Sanjeev Chopra said that the retail prices had increased by 14.51% over the past year.
• Worried over the increase in rice prices, the Centre has asked traders/wholesalers, retailers, big chain retailers and processors/millers to declare their stock position of rice and paddy every Friday.
• The Union Food Secretary said the decision is to manage the overall food inflation and to prevent unscrupulous speculation.
• Further, to check inflationary trends, the Centre has decided to start retail sale of ‘Bharat Rice’ to general consumers.
  • In the first phase, 5 lakh tonnes of rice have been allocated for retail sale under the ‘Bharat Rice’ brand through three agencies, the NAFED, NCCF and the Kendriya Bhandar.
  • The retail price for sale of Bharat Rice to general consumers will be ₹29 per kilogram.
  • Rice will be sold in 5 kg and 10 kg bags.
• Sufficient stock of good quality rice is available with the FCI, which is being offered to traders/wholesalers under the open market sales scheme at a reserve price of ₹29/Kg.

Q1. What does Consumer Price Index measure?

A consumer price index is a price index, the price of a weighted average market basket of consumer goods and services purchased by households. The CPI is calculated by using a representative basket of goods and services.

Q2. Which soil type is most suited for Rice Cultivation?

Soils with good water retention capacity with high amount of clay and organic matter are ideal for rice cultivation. Clay or clay loams are most suited for rice cultivation.

Source: To check price rise, govt allows retail sale of rice at Rs 29/kg from next week | Hindu