This article is relevant to UPSC Civil Services Exam, specifically for Paper 3 of the General Studies syllabus, which covers Economy and Agriculture.
UPSC Relevance
This article is relevant to UPSC Civil Services Exam, specifically for Paper 3 of the General Studies syllabus, which covers Economy and Agriculture.
What You Need to Know
India's rice policies, including MSP, procurement, and ethanol production, need rationalisation due to their impact on the environment, groundwater, and the economy. The current policies lead to overproduction, waste, and environmental degradation.
Why It Matters for UPSC
The importance of rationalising rice policies lies in their huge economic and environmental implications. India is the world's largest rice producer and exporter, but the current subsidy regime leads to overuse of groundwater, high greenhouse gas emissions, and distorted market incentives. For instance, the production of one kg of rice requires about 4,000 litres of water for irrigation. The government's subsidy on rice cultivation in Punjab amounted to ₹38,973/hectare in 2023-24.
Current Relevance
The recent decision to divert broken rice for ethanol production and the MSP for paddy at ₹2,369/quintal have significant implications. The government aims to reduce rice stocks and cut down carrying costs, but the long-term effects on the environment and economy need consideration. The ethanol blending programme, while aimed at reducing dependence on fossil fuels, also needs a rethink in the context of rice procurement and use.
Key Points for Revision
- •India is set to become the world's largest rice producer, with 154 million metric tonnes in 2025-26.
- •The MSP for paddy is ₹2,369/quintal, with states like Chhattisgarh paying 40% above MSP.
- •The production of one kg of rice requires about 4,000 litres of water for irrigation.
- •The combined subsidy for paddy cultivation in Punjab amounted to ₹38,973/hectare in 2023-24.
- •The government has diverted 5 MMT of broken rice for ethanol production in FY26.
- •The retail price of rice has been frozen at ₹242 per 45 kg for years, with the government absorbing 85-90% of the economic cost.
Prelims Practice MCQs
Q1. What is the primary reason for rationalising rice policies in India?
(a) To increase rice production
(b) To reduce environmental impact and economic burden
(c) To promote ethanol production
(d) To decrease MSP for paddy
The primary reason for rationalising rice policies is to address the environmental and economic implications of current policies, such as overuse of groundwater, high greenhouse gas emissions, and distorted market incentives.
Q2. What is the MSP for paddy in 2025-26?
(a) ₹2,000/quintal
(b) ₹2,369/quintal
(c) ₹2,500/quintal
(d) ₹3,000/quintal
The MSP for paddy in 2025-26 is ₹2,369/quintal, which has significant implications for rice procurement and production.