Decentralized paddy procurement

The clamour for local procurement of food grains is growing in states like Assam which is one of the ten top rice-producing states. Ironically, even after nearly two-and-a-half decades of the introduction of the Decentralized Procurement System (DCP) by the Central Government, local procurement is yet to take off in most states. The slow pace of building procurement and storage infrastructure has been a stumbling block to decentralized procurement of foodgrains in most states. The scheme envisages the State Government itself directly purchasing paddy/rice and wheat, storing and distributing procured food grains under the National Food Security Act through the public distribution system. The Central Government undertakes to meet the entire expenditure incurred by state governments following approved costs. Information furnished by the Ministry of Food, Consumer Affairs and Public Distribution to the Parliamentary Standing Committee says that 16 states have so far adopted the DCP mode of procurement for rice and nine states adopted the DCP mode for Wheat. From the northeast region, only Tripura figures in the list of these states which speaks volumes of the dependence of the region on the centralized procurement system for PDS rice/wheat distribution. Under Centralized Procurement System, the Food Corporation of India (FCI) or state agencies undertake the procurement of food grains and hand over the stocks to FCI for storage. FCI supplies rice or wheat from its storage of the central pool of food grains to states against allocations made by the Central Government under the NFSA. Surplus stocks in a state are transported to other states for distribution under PDS. FCI also reimburses the cost of food grains incurred by state agencies. The parliamentary panel states in its report that the DCP scheme contributed remarkably to the increased efficiency of the PDS by making it possible to supply food grains suited to local tastes. The committee recommends that even though the DCP scheme is not mandatory, the ministry should encourage its adoption to reduce the cost of distribution and to ensure that more local farmers are benefitted from the Minimum Support Price (MSP). The procurement figures speak volumes about the disparity in passing on the MSP benefits to farmers of various rice-producing states. FCI procurement data show that for the Kharif Marketing Season 2021-22, only 47899 farmers have benefited from procurement at MSP in Assam so far. In sharp contrast, 9.33 lakh farmers in Punjab, 18.69 lakh in Telangana, 21.05 lakh in Chhattisgarh, and 9.47 lakh in Uttar Pradesh have benefited so far under KMS 2021-21 which is under progress and these figures will increase. Even in Haryana, which produces fewer quantities of rice than Assam, 3.10 lakh farmers have benefitted. The parliamentary committee underscores the need for the creation of necessary infrastructure in a time-bound manner to facilitate procurement, storage and distribution. Its report, however, brings to light the slow pace of work building infrastructure in the northeast region. During the year 2020-21, the physical target set for construction of godowns in North-eastern states was 30,020 MT but achievement was nil. During the year 2020-21, the work of construction of godowns at five locations in the region was in progress. The government attributes the main reason for the non-achievement of targets in 2020-21 to the outbreak of Covid-19. Besides, issues like delay in handing over of suitable land by state governments, inclement weather and problems like regular floods, landslides and accessibility issues also hinder the smooth progress of works almost in the entire region. These problems are not unknown and finding innovative solutions to overcome them has been the key challenge which needs to be prioritized. Another key benefit of the adoption of decentralized procurement is the reduction of loss during transit. The Assam government setting a target of procurement of 10 lakh MT of paddy at MSP from farmers in the state demonstrated the push by the State government to the improvement of paddy procurement under the centralized procurement system. The official data show that 40% of the target could be met by June and the number of farmers who benefited from the procurement was less than 50,000. One of the reasons behind procurement being less than target despite efforts by the State government is making the production of land certificates by farmers selling paddies to procurement agencies in addition to other documents like Aadhar, voter Id, and bank accounts. The State government relaxed the norm for those farmers who do not have land certificates and allowed the submission of certificates issued by the laat mandals or village heads, but FCI refused to accept the alternative documents. Adoption of decentralized procurement by the Assam Government can help overcome this problem as procurement, storage and distribution will then be carried out by the state agencies and relaxation of norms will not be a major issue. Apart from strengthening existing paddy procurement centres, Assam needs to build more procurement centres and storage infrastructures with support from the Central government at a faster pace for decentralised procurement.