FCI revises guidelines for paddy procurements

Central govt had recently revised the memorandum of understanding of decentralised procurement between the State and the Central govts for procurement of paddy and delivery of custom milled rice

Hyderabad: The Central government declared that the Telangana government or its agencies should procure paddy only for Minimum Support Price (MSP) fixed by the former. It had clarified that in case of providing any additional financial incentive in direct or indirect form by the State, such paddy will not be considered into the Central pool beyond the allocated quantity of paddy.

According to officials, the Central government had recently revised the memorandum of understanding of decentralised procurement (DCP) between the State and the Central governments for procurement of paddy and delivery of custom milled rice (CMR).

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Though the MoU has been in force since the Kharif marketing season of 2019-20, the revised guidelines restrict the State government from paying any additional incentive more than MSP especially when the State intends to procure more than the allocated quantity fixed by the Centre.

The Food Corporation of India (FCI) allocates certain quantity of paddy to be supplied by a State. However, it can procure additional quantity keeping in view of market requirements and also paddy yield. For instance, Telangana supplied about 52.23 lakh tonnes of 83.01 lakh tonnes paddy procured across the nation during Yasangi last year.

The procurement was made beyond the allocated quota to Telangana State which became an advantage for the State government which procured entire paddy crop from farmers who were in crisis due to the COVID-19 pandemic.

However, the State government suggested farmers to cultivate fine variety paddy which was in demand in the market during Kharif (Vaanakalam) and farmers took up paddy cultivation in about 55 lakh acres. In view of COVID pandemic, Chief Minister K Chandrashekhar Rao asked the officials to procure entire paddy crop once again and even suggested to pay additional incentive for fine variety paddy. But the FCI guidelines have hampered the plans.

“Though the State government is willing to bear expenditure towards providing additional incentive to farmers. It would be a challenge for us to sell entire produce in the market as the FCI is not willing to purchase the additional quantity paddy if it was above the quota allocated under the Central pool,” a senior official explained to Telangana Today.

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