States agree to Centres proposal on grain procurement, distribution

New Delhi, Oct 28 | Updated: Oct 29 2004, 05:46am hrs
State food ministers have agreed to undertake procurement and distribution of grains through their designated agencies and co-operatives as the Central government agreed to render a package of incentives.

The package of incentives was proposed at the conference of state food secretaries held on September 17 in New Delhi.

The one-day conference of state food ministers, presided over by Union food and agriculture minister Sharad Pawar on Thursday, unaniously adopted all the 13 resolutions passed earlier at the conference of food secretaries. This conference was attended by food ministers of 21 states, Lt Governor of Andaman & Nicobar Islands, food secretaries and senior officials of different states and Union Territories.

Briefing mediapersons about the outcome of the conference, Union food secretary SK Tuteja said, The states agreed to procure grains through their designated agencies and co-operatives against the declared minimum support prices (MSPs) and also to distribute the same under the public distribution system (PDS). This would be an ideal situation as grains grown locally are acceptable in taste to the people in the area. This would considerably reduce the transportation cost.

Already nine states like Bihar, West Bengal, Madhya Pradesh, Orissa, Assam, Nagaland, Uttaranchal, UP and Tamil Nadu have began procuring grains, he said.

Mr Tuteja said if any state has surplus stock after distribution, they can sell it to the Food Corporation of India.

As part of the incentive package, the Central government has agreed to bear the transportation cost of paddy from the place of procurement to storage points and from storage points to mills. The village-level societies, engaged in grain procurement, will get a commission amounting to 1% of the MSP. The Central government will also bear the transportation cost of gunny bags from railway station to the points of use. The milling charges for parboiled paddy has been raised from Rs 15 a quintal to Rs 20 a quintal.

The commission for distribution of highly-subsidised wheat at Rs 2 per kg and rice at Rs 3 per kg to the poorest of the poor under Antodaya Scheme by fair price shops (FPSs) has been fixed and will be paid by the Central government. Earlier there was no commission on distribution of grains under the scheme. This measure will help check diversion of grains, said Mr Tuteja.

He added that as there were 4.75 lakh FPSs, the Central governments subsidy would amount to additional Rs 200 crore.

The food secretary said that the ministry would take up with the bankers and the finance ministry the issue of credits to FPSs under priority sector lending. The FPSs should be multi-product and service centres. They can act as STD booths, LPG/kerosene dealers, distributors of ORS or other public utility items. This would enhance the viability of FPSs, he said.

Mr Tuteja said that the state governments had expressed their reservations about the estimates made by the Planning Commission about the families living below the poverty line (BPL).