Note recall & bank transfer hit rice scheme - Farmers sell paddy to traders instead of opting for govt procurement that feeds CM project

Pranesh Sarkar, TT, Calcutta, Feb. 2: The Centre's demonetisation drive and the Bengal government's decision to transfer money directly to the bank accounts of paddy farmers have cast a cloud on a pet scheme of Mamata Banerjee under which cheap rice is provided to 2 crore people.

"We have been able to procure only 1.97 lakh tonnes of paddy since December 27. We need at least 3 lakh tonnes of paddy every month to run the Khadyasathi scheme. The shortage of cash in banks in rural areas has done the damage," said Jyotipriyo Mullick, the food and supplies minister.

The scheme is heavily dependent on government procurement of paddy from farmers.

In addition to the beneficiaries of Khadyasathi, around 6.01 crore more people in Bengal receive cheap food grain under a central scheme.

The Bengal government has decided to directly transfer the money to the bank accounts of farmers in the aftermath of allegations that the agencies entrusted with the job of procuring paddy were delaying payments to them.

However, because of the cash crisis precipitated by the demonetisation and the cap on cash withdrawals, the farmers have not been able to take out money from banks, forcing them to sell their produce at lower rates to local traders.

"Although the restrictions on withdrawals have been eased, banks in rural areas are not being able to offer more than Rs 5,000 a week to each customer. Farmers need cash to invest in the winter crop besides meeting their daily expenses," an official said.

The state government buys paddy from the farmers at the minimum support price of Rs 1,470 a quintal and produces rice. The rice is sent to ration shops, where it is sold to Khadyasathi beneficiaries. More than 1.03 crore people get 5kg of food grain at Rs 2 a kilo every month and around 97 lakh people get 1kg of food grain at Rs 13 a kilo.

"To run the scheme, we have a target of procuring 35 lakh tonnes of paddy this year. For that, we need to procure 3 lakh tonnes of paddy a month. But we are lagging behind," a food department official said.

The Centre can supply grain from other states if enough procurement is not done in Bengal, but the state government has to arrange for the rice required for Khadyasathi.

According to sources in Nabanna, the progress of the procurement has worried the government.

"Soon after harvesting the monsoon crop in November and December, farmers sell a large portion of their produce to reinvest in the winter paddy. It is clear from the early signs that we will face problems in meeting the procurement target this year," a source said.

An agriculture department official said the government had received reports from the districts that the farmers had sold the bulk of their produce to local traders at rates lower than the minimum support price.

"The farmers avoided going to the government procurement camps and sold their paddy to the local traders at around Rs 1,200 a quintal. They did not sell their produce to the government because the money would have been transferred directly to their bank accounts," the official said.

Subol Das, a farmer from Raipur near Bolpur in Birbhum, said he had produced 32 quintals of paddy this year, but did not sell it to the government.

"I have sold a portion of the produce to a local trader who offered me Rs 1,190 a quintal. It is better because I got the amount in cash and did not need to visit the bank several times to withdraw the money," Das said.