Demonetisation has not adversely impacted the rice procurement drive by the Food Corporation of India (FCI) and affiliated state government agencies so far. The rice equivalent of paddy procurement from farmers, which began officially for the 2016-17 marketing season on October 1, has crossed 22 million tonne (mt) till Wednesday, which is 17% more than the purchase during same period last year.
States such as Punjab, Haryana and Chhattisgarh, where procurement has been completed for the this season, have reported purchase by the agencies more than last year. This is mainly because of normal monsoon rains and direct transfer of the minimum support price (MSP) to farmers’ bank accounts.
The state-wise break-up of some key rice-procuring states are: Punjab (11 mt), Haryana (3.5 mt), Chhattisgarh (3.03 mt), Telangana (1 mt) and UP (0.7 mt). In Odisha, which contributes significantly to the Centre’s procurement drive, the agencies have begun their purchase operations a couple of week back. So far, the agencies have purchased around 6 lakh tonne of rice from farmers.
While during the entire 2015-16 marketing season (October-September) government agencies had lifted more than 34 mt of rice from farmers, this year the food ministry has set a target of 33 mt. “We will achieve procurement target for the session, which would ensure sufficient rice stocks in the central pool,” a food ministry official said.
A food ministry official said that the government’s move on demonetisation has not impacted the procurement drive, as the amount equivalent of MSP is directly transferred to farmers’ bank accounts in all the states with the exceptions of Punjab and Haryana, where the MSP is transferred to arthias’ or commission agents’ accounts. The commission agents subsequently transfers the money to farmers’ accounts for purchase of paddy.
The food ministry has been giving thrust on rice procurement in other non-traditional states Bihar, Jharkhand and eastern Uttar Pradesh, so that farmers get MSP for their produce. Since last year, FCI has been encouraging private players to involve the private sector in the procurement of rice in the eastern states.
FCI, in collaboration with state government agencies, procures rice and wheat largely from Punjab and Haryana, Andhra Pradesh, Telangana, Odisha, Chhattisgarh and Uttar Pradesh. FCI stores these in warehouses and distributes to states for targeted public distribution system (TPDS) operations. Under the decentralised procurement (DCP) followed in Chhattisgarh, Odisha and others, rice and wheat are procured from farmers within their borders and after meeting the local TPDS requirement, the surplus, if any, is offered to FCI for delivery in grain-deficit regions.
Earlier in June, the government had hiked the MSP of paddy by R60 to R1,470 per quintal for the 2016-17 season. After procurement, paddy is given to millers and FCI receives back rice, which is subsequently distributed under PDS and a portion is kept for buffer stocks.