1. Central grain pool: Only five states contribute significantly

Central grain pool: Only five states contribute significantly

The FM said online procurement of foodgrains would be promoted to ensure MSP benefits to farmers across the country

By: | New Delhi | Published: March 2, 2016 12:08 AM

Since the policy for decentralised procurement of foodgrains was launched almost two decades ago, only five states — Madhya Pradesh, Chhattisgarh, Andhra Pradesh, Telangana and Odisha — have contributed significant amounts of grain to the central pool.

Finance minister Arun Jaitley, in his Budget speech on Monday, had announced that more states would be encouraged to adopt this system. Jaitley also said online procurement of foodgrains would be promoted to ensure benefit of minimum support price (MSP) to farmers across the country.

Under the current policy, the Food Corporation of India (FCI), through state government agencies, procures a major chunk of foodgrains, mostly consisting of rice and wheat from farmers in mostly Punjab and  Haryana. Others states such as Rajasthan, Madhya Pradesh, Chhattisgarh and Odisha carry out the purchase of foodgrains from farmers under a decentralised purchase scheme.

According to food ministry data, of the total wheat procurement of 28 mt in 2015 – 16, decentralised procurement states Madhya Pradesh and Gujarat contributed 7.3 mt and 0.7 mt of grain, respectively, to the central pool.

Similarly, in the case of the ongoing kharif procurement season(2015 -16) for rice, of the total purchase of 28.33 mt of rice so far by the agencies from farmers, decentralised procurement states such as Chhattisgarh (3.9 mt), Andhra Pradesh (2.7 mt), Telangana (1 mt) and Odisha (2 mt) contributed a chunk of rice purchase.

Sources told FE that that the food ministry would target five states — Uttar Pradesh, Haryana, Rajasthan, Maharashtra and Jammu & Kashmir for decentralised procurement of wheat. In the case of paddy or rice procurement, seven states — Punjab, Haryana, Uttar Pradesh, Maharashtra, Jharkhand, Assam and Gujarat — would be urged to join the decentralise procurement scheme.

The decentralised procurement of foodgrains was initiated in 1997-98 with a view to enhancing the efficiency of procurement and PDS, and encouraging local procurement to the maximum extent, thereby extending the benefits of MSP to local farmers, as well as to save on transit costs. This also enables procurement of foodgrains more suited to the local taste.

Under this scheme, the concerned state government itself undertakes direct purchase of rice and wheat on behalf of centre, and also stores and distributes these foodgrains under Targeted Public Distribution System (TPDS). The Centre also monitors the quality of foodgrains procured under the scheme and reviews the arrangements made to ensure that the procurement operations are carried on smoothly.

On the online procurement system, a food ministry official said that all the states would be encouraged to follow an online system. Under this system, all the farmers bringing in their produce would be registered digitally and would be informed about the date and place of procurement by state agencies.

Under the online system, the payment to the farmers would be transferred directly to the farmers’ bank account, so the Centre would be able to track payment of MSP to farmers.

States such as Madhya Pradesh, Chhattisgarh, Odisha, Telangana and Andhra Pradesh have completely digitised the procurement process.

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