Farmers Push for Action as Prices Stay Low

The Inter-Ministerial Committee (IMC), led by Union Home and Cooperation Minister Amit Shah, will review the continued low prices of basmati paddy. This discussion follows the Centre’s decision to remove the $0,95 per kg minimum export price (MEP) on basmati rice in September.

“Exporters had assured that removing the MEP would help farmers receive better prices, but that hasn’t happened,” said a trade source. Farmers are increasingly demanding a legal guarantee for minimum support prices (MSP), adding pressure on the government to act.

Price Recovery Falls Short of Expectations

The average price of basmati paddy has risen from $0,31 per kg on September 13 to $0,37 per kg for the 1509 variety. However, prices remain far below last year’s levels, when the average reached $0,49 per kg during the same period.

In some regions, prices are even lower. For example, the 1509 variety is selling for as low as $0,30 per kg in parts of Uttar Pradesh and under $0,36 per kg in Haryana and Punjab. Both Haryana and Punjab have proposed encouraging farmers to switch to maize or oilseeds if a legal MSP guarantee is implemented.

Record Production Creates Market Oversupply

An estimated increase of 15–20 percent in basmati production this year has added to the price pressure. Farmers expanded acreage significantly after receiving high returns last year. Combined with favorable weather, production has surged to create a market glut.

Despite these challenges, India’s basmati exports rose during the first half of the fiscal year to 3.24 million tonnes, up from 2.61 million tonnes a year ago. Export revenues also grew to $3,38 billion, compared to $2,96 billion during the same period.

Export Market Risks and Challenges

The Agricultural and Processed Food Products Export Development Authority (Apeda) could not conduct a basmati production survey this year due to disagreements among exporters about last year’s findings. Last year, India produced 9.84 million tonnes of basmati over 213,500 hectares of farmland.

Exporters remain cautious, particularly in the Iran market, where geopolitical tensions and outstanding payments have increased risks. Some exporters, who purchased basmati at higher prices, are struggling to liquidate their inventories, further compounding market challenges.

A Balancing Act for the Government

India’s basmati market faces a delicate balance between meeting domestic farmer demands and maintaining strong export performance. The IMC’s review is expected to provide critical insights and solutions to ensure fair pricing while navigating global uncertainties.









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