Kochi: Growers of organic rice in Kerala’s Palakkad district, who last week won a state government award for their farming practices, will be staring at trouble when the harvest season starts next week. However, it has nothing to do with the scanty monsoon rains, but a crunch of storage space.
Problem of plenty: Foodgrain stored in the open near Indri, Haryana. India banned the export of non-basmati rice in October 2007. Ramesh Pathania / Mint
As a result of a nearly two-year-old ban on the export of non-basmati rice and the premium tag on organic varieties, warehouses of both farmers and buyers are overstocked.
“Our biggest problem is that we have no place to store it since our buyer, who has been paying a premium of 25% (for organic rice), has not lifted the paddy harvested last season in February from our godowns but has already paid us the amount (for it),” says R.N. Ramakrishnan, treasurer of the Vadakkencherry Padasekhara Samiti, an association of some 25 farmers of organic rice.
The Kerala-based Poabs Group, which has a multi-crop organic plantation in the district, has been buying about 120 tonne of organic rice in the past couple of years from the association.
The firm has similar arrangements with other organic rice farmers’ associations both in Palakkad as well as in Kuttanad, a rice bowl in central Kerala, says Thomas Jacob, director of Poabs Group.
“Though we paid the farmers for the nearly 60 tonnes of paddy harvested by the (Padasekhara) Samiti early this year, the stock still lies in the godowns of the farmers as we have no place to store it,” he says.
This harvest season, the firm will be stretched further to store the rice it buys. Its storage houses are already stocked with at least 150 tonnes of organic rice it bought in previous seasons. And since rice cannot be stored for more than six months without its quality deteriorating, Poabs is considering selling some of its stock in the local market at normal rates. Typically, organic rice is sold at a 75% premium to ordinary rice varieties that sell for about Rs20 per kg.
“Yes, we will have to bear the loss... In a way, it is a distress sale,” said Thomas.
“These farmers have gone organic on the promise that their stock will be bought. If we back out now, all the hard work done will be wasted,” Thomas added.
India has banned the export of non-basmati rice since October 2007 to curb increasing prices and ensure sufficient stock for domestic consumption.
Poabs had then just started developing a market for organic rice in France and Germany, exporting around 20 tonnes a year.
P. Gangadharan, president of the Vadakkencherry grama panchayat, says the local self-government supports growers of organic rice by offering them a 50% subsidy on organic manure, but if the situation continues, distress sales would be inevitable.
K. Kaladharan, a farmer from Nemmara, a village in Palakkad district, voices similar fears. If there is no market for organic rice, why would firms such as Poabs continue buying, he asks.