Government’s paddy price support falls short

On July 4, the government set the support price for paddy: Rs 3,410.51 per quintal for coarse paddy and Rs 3,580.62 per quintal for medium-grade paddy. Hearing this news, Devi Chaudhary, a farmer from Lamki Chuha-4, Kailali, was delighted. Having cultivated paddy on almost eight bighas of land, Chaudhary was hopeful for a good income this year. The government’s announcement of a support price higher than the Rs 3,100 per quintal being offered by traders brought joy to Chaudhary and many other farmers.

However, the government’s announcement didn’t translate into tangible benefits for Chaudhary. The government’s paddy purchasing centers, run by the Food Management and Trading Company Limited, were not accessible to him. As a result, Chaudhary had to sell his paddy to private traders for Rs 200 less per quintal than the government-set price. Adding to his disappointment, Chaudhary said he incurred further losses by storing the paddy at home for nearly two months, hoping for better prices. “I was thrilled when I heard the government had announced a support price,” Chaudhary said. “But the purchasing centers were far away, and the transportation cost was too high. That’s why I had to sell my paddy to private firms at a lower price. On top of that, storing the paddy at home for two months resulted in additional losses.”

Chaudhary explained that his stored paddy suffered losses due to drying, rodent damage, and birds. Initially, he had been cultivating paddy on three bighas but expanded to eight bighas this year by leasing additional land. Favorable weather, timely wedding, adequate fertilizers, and irrigation resulted in a harvest of over 200 quintals. Despite this, selling his paddy for Rs 200 less per quintal than the government’s price left him disheartened. He believes the government’s support price is merely a popular slogan. 

“The government should ensure that it buys paddy from farmers easily if it announces a support price,” Chaudhary said. “If farmers don’t benefit, it’s just a cheap slogan.” He added that while the government declares a minimum support price before planting begins, common farmers are unable to benefit due to a lack of designated purchasing centers, limited quotas for government procurement, and the inaccessibility of these centers.

Farmers engaged in large-scale commercial farming manage to arrange seeds and fertilizers on their own. However, average farmers face challenges and often take seeds and fertilizers from traders on the condition of selling their paddy back to them. Many even take cash advances. 

Farmers who take seeds and fertilizers on credit from traders for nearly four months are compelled to sell their paddy back to these traders at a lower price. “We’ve been buying seeds from private firms and selling our paddy to the same trader for years,” said Puran Pandey, who was unaware of the government’s support price. “The relationship with the trader and the credit taken for seeds and fertilizers means we continue to sell our paddy locally, even at a lower price.”

The lack of access to the Food Management and Trading Company’s designated purchasing centers has further deprived common farmers of the benefits of the support price.  

“From May and June, traders start investing in seeds, fertilizers, and even cash for farmers,” said food trader Raghu Upadhyay. “Since traders invest upfront, they expect some profit. There are risks, too—whether farmers will produce a harvest or repay the amount. That’s why traders buy paddy at a price lower than the support price. Additionally, government purchasing centers are far from farmers’ reach.”