Basmati rice millers in India offer higher price to farmers to cut use of chemicals

By Business Of Agriculture on 08 Aug 2018 | read

Basmati rice millers in India offer higher price to farmers to cut use of chemicals

Amid tightening food safety regulations overseas, rice millers are offering cash incentives to Basmati growers in a bid to wean them away from using pesticides. 

Farmers are being promised Rs 500 more per quintal of paddy for not using pesticides and fungicides that do not confirm to latest global specifications, and also for limiting dosages of others, traders told ET. The incentive is expected to double for farmers in Jammu as harvest period draws closer. 

Indian rice exporters are worried that Europe’s stringent norms on pesticide residue levels, and the likelihood of similar standards being adopted by Saudi Arabia, will hit exports of basmati if farmers fail to conform. As per a recent circular issued to exporters by the Saudi Food and Drug Authority (SAUDA), the pesticide residue levels have been restricted by 90%. 

“It is not feasible to meet European specifications in exports to Saudi Arabia as exports to the continent are currently restricted to brown , whereas varieties in demand in the Gulf country are different,” said Sanjiva Rishi, head marketing at Kohinoor Foods. 

Rice exporters have been advised by Agricultural and Processed Food Products Export Development Authority (APEDA) to not send high quantities of rice shipments to Saudi Arabia this week. The Gulf nation is warranting certification from exporters about compliance of MRL guidelines on shipments. 

“There is possibility of shipments getting cancelled till the matter is resolved with the Saudi authorities,” an official at APEDA said. Akshay Gupta, head of exports at KRBL, said, “Export of rice is already down to Europe and the US due to stringent residue norms and a hurdle in export to Saudi Arabia will affect basmati exports hard. The new norms from Saudi Arabia have come as a surprise as no timeframe has been extended for implementation.” 

Rice millers are seeking deals with farmers in Jammu where use of pesticides is low. “The production of rice is around 2 lakh tonnes in the district, but export demand for Europe and Saudi Arabia is over 1 million tonnes,” an exporter said. 

Where pesticide usage is less, millers are promising higher procurement price in advance. “It is necessary as most of the basmati farmers have small landholdings and they cannot afford crop failure due to attack by pests,” said Tejinder Singh, general manager at Supple Tek Industries. 

Indian authorities are already in talks with Saudi officials to resolve the matter favorably for the current season. Saudi Arabia buy on average about a fifth of the over 4 million tonnes of basmati rice exported from India. Rice export to the US and Europe has taken a hit in recent years after the maximum residue levels were reduced. 

With the export season set to start by October, exporters are seeking clarity over the new specifications, as most are unsure about how strictly the norms will be implemented. “It is not clear as when the circular will come into effect,” Rishi said. 

Punjab’s agriculture department has urged pesticide dealers and farmers to not use pesticides and fungicides that can leave higher residue. “Rice millers and agriculture officials are reaching out to farmers through announcements, through Gurudwaras, pamphlets and public meetings,” an official in Amritsar said.

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