Food security legislation requires quick answers, with procurement at plateau in traditionally supplying states. Centre looking at hitherto miniscule suppliers.
The Union government wishes to increase purchase of rice by agencies in states that have hitherto contributed only marginally to the central pool. The urgency has increased due to the new Bill, just introduced in the Lok Sabha, for legal entitlement to food security.
Paddy procurement in Andhra Pradesh, Punjab, Haryana and Chhattisgarh -- source of 80 per cent of procurement -- seems to have reached a plateau in recent years. The Centre is eyeing higher procurement from non-traditional sources such as Assam, Bihar, Jammu & Kashmir and Jharkhand.
The Bill seeks to provide legal entitlement of grain to 75 per cent of the rural and 50 per cent of the urban population. About 46 per cent of the rural and 28 per cent of urban people are to be classified as priority and the rest as general category. A priority category beneficiary is proposed to get seven kg of grain a month, a general category individual would get three to four kg a month.
Official estimates show annual procurement after the Bill takes effect would rise to 62 million tonnes from 55-60 mt. The additional requirement may not be huge, but the problem is that there is not much scope for more purchases by the central agencies in states contributing the most to the central pool.
The average annual procurement of grain between 2007-08 and 2010-2011 has been 56.7 mt, or 32.1 per cent. Rice procurement was 31 mt, while the rest is wheat. The non-traditional paddy procuring states -- Assam, Bihar, J&K and Jharkhand -- chipped in 3.1 mt of rice to the central pool in the 2010-2011 crop marketing year or just over nine per cent of the procurement of 34 mt.
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The Centre has directed the National Agricultural Cooperative Marketing Federation of India (Nafed) to procure rice from Assam on its behalf, in addition to Food Corporation of India (FCI) which usually does such an exercise. Nafed is not generally engaged in procuring grain; it purchases non-grain farm produce such as oilseeds and only when prices are required to be stabilised.
The food ministry’s efforts to raise the procurement of rice from non-traditional states will have to address issues such as poor infrastructure. Food ministry officials say less numbers of mandis, equipment for weighing, adequate staff and storage space for procured grains are the other hurdles in the way of raising grain procurement from non-traditional states.
To resolve the problem, the central government recently called a meeting of state food secretaries and asked them to adopt decentralised procurement. In this, the state purchases and sells grains on its own and the subsidy is transferred from the central pool. Quite a few states, Uttar Pradesh being one, have shifted to this system.
“A big problem of providing grain according to local choice will be sorted out if these states adopt the decentralised procurement model,” says a food ministry official, adding that FCI has opened centres in non-traditional states to procure paddy from farmers.
Officials say as the average size of land holdings in the traditional non-paddy procuring states is low, the central government has asked the state governments to improve the per hectare yield, so that marketable surplus improves through raising the usage of fertiliser and expanding irrigation, and milling facilities.
Apprehension has been expressed over the impact of raising the paddy procurement on private trade.
However, food ministry officials say expanding the coverage of procurement in newer areas won’t change anything, as only 30 per cent of the marketable surplus of grain is procured by state agencies, leaving the remaining in the hands of private trade.
“Since procurement as a percentage of total production will not substantially go up because of the Food Bill, it is not likely to have any adverse impact on private trade,” a senior food ministry official says.