What are the regulations with respect to rice prices? | Explained

Syllabus: GS-III

Subject: Economy

Topic: Agriculture and allied

Issue: Rice Production

Context: The Indian government made it mandatory for all traders, wholesalers, retailers, and millers to declare their respective rice stocks.

Paddy production in India:

  • The southern States have suffered a drop in paddy production because of inadequate rainfall.
  • However, in the north rice production (basmati and non-basmati) is up 15%.

Rice prices:

  • The retail price of rice has increased by 14.51% in the last one year.
  • Among the 430 varieties of rice produced in the country, the rice inflation is high in the varieties that is largely preferred by consumers.

Why are prices increasing?

  • The increase in Minimum Support Price for rice in the last five years.
  • Increase in the cost of transport, storage, etc.
  • Drop in production
  • The export duty levied by the government is neutralized by the high international prices.

What are the measures taken so far?

  • The government has asked traders, wholesalers, retailers, chain retailers and millers to report the stocks online.
  • It launched the retail sale of ‘Bharat Rice’ to general consumers at ₹29 per kg.
  • The export of broken rice was banned and specific export duties were imposed.

Way forward:

  • The government should prioritize sale for consumption since there is a demand for rice for consumption, ethanol production, and cattle feed.
Prelims Connect:

1. Bharat Rice: To check inflationary trends in the food economy, the Ministry of Consumer Affairs, Food & Public Distribution started retail sale of ‘Bharat Rice’ to general consumers.

Ø  The 3 agencies viz NAFED, NCCF and Kendriya Bhandar areselling Bharat Rice.

2. Minimum Support Price (MSP): it is a form of market intervention by the Government of India where a minimum amount of price is fixed for certain crops.

It aims to insure agricultural producers against any sharp fall in farm prices.


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