Madhya Pradesh, Chhattisgarh, Rajasthan and Telangana which are going into assembly elections have a significant share in procurement of paddy, wheat, chana and mustard from farmers under the government’s Minimum Support Prices (MSP) operations in the last six to eight years through stepping up of purchase operations at the local level.
In addition the farmers’ cooperative such as Nafed in collaboration with state agencies have stepped up chana (gram) and mustard seed purchase at MSP in Madhya Pradesh and Rajasthan for the government’s pulses buffer stock and bringing MSP benefits to the farmers.
The stepping up of grain purchase under MSP by state government owned agencies in Madhya Pradesh and Telangana has ensured that the two states currently are the second biggest contributors to the central pool stocks held by the Food Corporation of India (FCI) in wheat and rice respectively after the traditionally grain surplus Punjab.
Despite in sharp fall in procurement by the government agencies in the last two seasons, Madhya Pradesh purchase over 7 million tonne (MT) of wheat in 2023-24 rabi marketing season (April-June), which is 27% of total purchase of 26 MT across key producing states
Chhattisgarh and Rajasthan have expanded MSP procurement of paddy and wheat respectively from farmers. In one decade, Chhattisgarh government has declared a bonus above MSP on the paddy purchase to boost purchases at the local level.
Food ministry officials said that all the four states follow a decentralised procurement system (DCP) launched in 1997-98 by the food ministry aimed at encouraging local procurement and ensuring the benefit of MSP operations reach farmers as well as save transit cost for the government.
“The state agencies purchase grain from the farmers under DCP through MSP operations while surplus grain after the meeting requirement of the local public distribution system are handed over to FCI as a part of central pool stock,” an food ministry official told FE.
In the 2022-23 season, out of the total purchase of 2.3 MT of chana by Nafed for buffer stock, 0.79 MT AND 50,238 tonne was procured in Madhya Pradesh and Telangana respectively under MSP operations when prices fell below it.
Officials said that Nafed this year, after a gap of two years as prices were ruling above MSP, purchased one MT of mustard seed under MSP operations, out of which major purchases were in Rajasthan and Madhya Pradesh.
Sources said the political parties are likely to announce bonus over MSP for several crops to farmers as part of election manifestos.
Chhattisgarh government this season procured paddy from the farmers at Rs 2,640/quintal against a MSP Rs 2040/a quintal for 2022-23 season provided by the central government. This includes a bonus of Rs 600/quintal provided by the state government under the Rajiv Kisan Nyay Yojana scheme.
The parties are likely to promise an increased bonus provided by paddy procurement as the benefits reach more than 2.6 million farmers in the state.