Paddy farmers of Rajasthan’s Hadoti region and some other parts of India are selling their basmati quality paddy produce at half of the last year’s price as exports to the biggest market, Iran, has fallen due to United States trade sanctions against the Gulf state. About one-third of the rice exported from India goes to Iran.
“I recently sold 20 quintals of quality Bundi rice for Rs 2000 per quintal. About three years ago, the price was Rs 4000 per quintal,” said Manveer Singh Virk, a paddy grower from Surajmal Nagar in Bundi district of Rajasthan.
Virk said because of the fall in prices they are unable to recover the cost of Rs 25,000 to Rs 30,000 incurred for per acre of cultivation. “Rice cultivation is not as profitable as it used to be earlier,” he said.
Dashrath Kumar, general secretary of Hadoti farmers union said the rice produced in Kota region is mostly exported because of its Basmati like aroma and thin and long rice grain. “The demand is high in Iran because of its taste and smell,” he said.
According to Rajasthan agriculture department, rice was grown on around 1.12 hectares of land in the Hadoti region this year and the estimated rice production would be around 4 lakh metric tonnes.
But, the farmers are not getting the best price for their crop as exports to the Gulf and Iran have reduced due to strained US-Iran relationship. “With decline in export of rice from Kota region due to sanctions against Iran by the US, the prices have dipped substantially,” said farmer leader Jagdish Kumar.
Joint Director, agriculture, Kota region, Ramavtar Sharma, agreed and said that less export demand has led to a crash in the prices.
According to the US Department of State website, the US had imposed several economic sanctions against Iran since early this year for Tehran’s purported support to terrorist groups. The sanctions are aimed to contain Iran’s nuclear programme and as a punishment for the alleged violation of human rights.
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The US also asked countries not to buy crude-oil from Iran. A huge dip in international oil prices during Covid-19 pandemic also affected Iran’s cash inflow badly.
Rice exporter, Neelesh Patel, said Iran was the major buyer of rice produced in Hadoti region but a decline in its purchasing power, due to the drop in the crude oil prices during Covid-19 pandemic and the US sanctions on its oil sale, had led to this situation.
In 2019-20, India exported rice worth Rs 32,000 crore, of which about 10,800 crore was exported to Iran alone, according to an estimate by the All India Rice Exporters Association. Earlier this year, the association issued an advisory to all its members asking them to be cautious and not to send rice shipment to Iran till the situation improves.
“Dues worth Rs 800 crore to big Indian exporters are still pending with Iranian firms. We have not got payment for exports last year and therefore traders are not willing to export rice on credit,” Patel said.
Chauthmal Nagar, a board of management member of Agriculture University, Kota, blamed the US-Iran stand-off and the low demand for high quality rice in Gulf countries due to Covid-19 as the main reasons for Hadoti rice fetching poor price.
However, farmers and rice traders in the region believe that the situation may change with Joe Biden taking over as US President from Donald Trump in January 2021.
Dashrath Kumar said now with the election of Joe Biden as new US President, the rice farmers are hopeful of the revival of rice exports soon. He added that the farmer organizations of Hadoti region have been asking the Central government to resolve the rice export issues claiming it alone can help in fetching the right price for the farmers in the domestic market.
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