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Faced with inadequate storage facility, the Centre has decided to engage private players during the current kharif season for procurement of rice in Uttar Pradesh and four other eastern states.
The Union Food Ministry has prepared a policy acting on the recommendations of the high-level committee of the state-owned Food Corporation of India (FCI).
Rice procurement for the 2015-16 kharif season would begin from October. And the government has kept a total procurement target of 30 million tonnes (MT) for the season.
"The procurement policy has been finalised for Uttar Pradesh, Bihar, Jharkhand, West Bengal and Assam. Private players will be roped in for rice procurement wherever necessary in these states," a senior Food Ministry official told PTI.
These five states contribute over 40 per cent of the country's estimated total rice production of over 102 MT, but the procurement has been very "negligible", the official said.
In 2014 kharif season, 5.13 MT of rice was procured in these states. Despite West Bengal being the top rice producing state at 15.1 MT, procurement here was only 1.80 MT in the said period.
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As per the proposed plan, the official said Bihar and West Bengal that follow a decentralised procurement policy (DCP) would be permitted to engage private players either independently or on behalf of the state agencies.
In other non-DCP states, FCI would step up procurement operations at the minimum support price (MSP). "Where FCI and state governments are not able to open procurement centres, private agencies will be engaged," the official said, adding that private agencies would be selected via tenders.
DCP states are those where FCI is not involved in procurement. States procure foodgrains on their own and supply to the PDS. The Centre, in turn, bears the difference in the margin between the issue price and the economic cost for the states. Any surplus food stocks after catering to the PDS is picked up by the central pool.
The north eastern states with inadequate infrastructure for procurement have traditionally not been on the FCI radar, even though farmers in the states are often compelled to sell their produce below the MSP.
The FCI restructuring panel, headed by former food minister and veteran BJP leader Shanta Kumar, had in its report suggested the government to focus more on north-eastern states to ensure farmers in the states benefit from Centre's price support mechanism.
