The Food Corporation of India (FCI) has awarded a contract to the National Collateral Management Services Ltd (NCML) to carry out paddy purchase operations in Jharkhand.
This will be for the first time that a private party has been allowed to purchase rice from farmers on behalf of FCI in a bigger scale. In August this year, the Centre had decided to engage private players during the current kharif season for procurement of rice in eastern Uttar Pradesh, Jharkhand, West Bengal, and Assam.
Sources told FE that NCML would be allowed to purchase paddy from the farmers in the identified clusters where operations of FCI are not robust. “We are at present not looking at huge volume of procurement by private parties.
However, we are expecting the private sector to bring in efficiency in grain purchase system,” a food ministry official said.
The FCI would allow shortlisted private firms in only those clusters where there is possibility of procurement of one lakh tonne of rice equivalent of paddy. Besides, the new policy allows the private parties to open as many purchase centres as possible in the allotted cluster, subject to a cluster covering a minimum 500 to 1000 hectare.
NCML has been offered a couple of clusters in Jharkhand for paddy procurement, which is likely to commence in the next few weeks. The corporation would soon announce successful bidders for the paddy procurement operations in eastern Uttar Pradesh and subsequently in West Bengal. Meanwhile, the Bihar government has stated that the state would involve primary agricultural cooperative societies in paddy procurement this season.
The private parties would be engaged in procurement of paddy in a cluster identified by the respective state government and the private company would deliver custom milled rice (CMR) at the FCI or state government-owned agency godowns. “On the delivery of CMR to FCI or state-owned corporations, the private players would be reimbursed the minimum support price (MSP) and statutory charges paid by them upon production of proof of payment, besides the incidentals quoted in the tender document,” an official said.
The policy to involve private sector in grain procurement follows recommendations by the high level committee (HLC) headed by former food minister Shanta Kumar earlier this year. The HLC had suggested that FCI should move on to help those states where farmers suffer from distress sales at prices much below MSP, and which are dominated by small holdings, like eastern Uttar Pradesh, Bihar, West Bengal, Assam, etc.
The food ministry has set a target to procure 30 million tonne of rice during the kharif marketing season (2015-16) starting from October 1.
Till Thursday, Punjab, the biggest contributor to the central pool, has purchased over 9.3 MT of rice equivalent of paddy against the target of 8.2 MT for the 2015-16 marketing year. Similarly, Haryana has purchased more than 2.8 MT of rice against the target of 2.3 MT.