State-run Food Corporation of India (FCI) has decided to allow private players to purchase about 10 lakh tonnes of kharif rice in Uttar Pradesh and some eastern states in the ongoing procurement season.
Rice procurement for the 2015-16 kharif season began from this month. The government is targetting total procurement of 300 lakh tonnes, of which 69 lakh tonnes would be purchased from five north eastern states. The states are Uttar Pradesh, Bihar, Jharkhand, West Bengal and Assam.
FCI is the government's nodal agency for procurement and distribution of foodgrains.
The private sector is being roped in the government's procurement policy following recommendation by an FCI restructuring panel, headed by former food minister and veteran BJP leader Shanta Kumar.
The panel had recommended that government should focus more on north-eastern states to ensure farmers in those states benefit from the Centre's price support mechanism.
"FCI has set a rice procurement target of 69 lakh tonnes for north eastern states in the 2015-16 kharif season. Of which, private players will be allowed to procure 9.95 lakh tonnes," a senior Food Ministry official told PTI.
The FCI is in the process of shortlisting private companies for rice procurement in four states. For Bihar, the tenders for private procurement would be floated after assembly elections, the official said.
In Uttar Pradesh, private players will be allowed to buy 3.5 lakh tonnes of rice out of the targeted 27.50 lakh tonnes for the 2015-16 kharif season, the official added.
The north-eastern states with inadequate infrastructure for procurement have traditionally not been covered under the FCI's procurement programme and farmers are often compelled to sell their produce below the MSP.
These five north eastern states contribute over 40 per cent of the country's total rice production, but the procurement has been very negligible.
The government has fixed the minimum support price of paddy at Rs 1,410 per quintal (common grade) and at Rs 1,450 per quintal (A grade) for the 2015-16 kharif season.
As per the government's first estimate, rice production is estimated to decline to 906.1 lakh tonnes in the 2015-16 kharif season from 908.6 lakh tonnes last year due to deficient monsoon.
