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In view of the inadequate storage facility, the Centre Government has decided to engage private agents during the current kharif season for the procurement of rice in Uttar Pradesh and in four other eastern states namely Bihar, Jharkhand, West Bengal and Assam. In this regard, the Union Food Ministry has prepared a policy to take necessary action on the recommendations of the high-level committee of the state-owned Food Corporation of India (FCI). 

According to the sources, the rice procurement for the 2015-16 kharif crops would begin from October and the government has kept a total procurement target of 30 million tonnes (MT) for the season. Further, the proposed procurement policy has been finalized for Uttar Pradesh. Private Agencies will be roped in for rice procurement wherever necessary in Bihar, Jharkhand, West Bengal and Assam states as it was narrated by a Senior Food Ministry official (PTI). 

It has been observed that these five states contribute over 40 percent of the country’s estimated total rice production of over 102 MT, but the procurement has been found to be very “negligible”. According to a report, in 2014 kharif season, 5.13 MT of rice was procured in these five states; however, West Bengal being the top rice producing state at 15.1 MT, procurement was just only 1.80 MT during the stated period.

Further, as per the proposed plan, it was told that Bihar and West Bengal that follow a Decentralized Procurement Policy (DCP) would be permitted to engage private agents either independently or on behalf of the state agencies. While, 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. Further, it was also added that private agencies would be selected through tenders.

The DCP states are those where FCI is not involved in procurement. States procure food grains on their own and supply to the PDS. The surplus food stocks after catering to the PDS is picked up for the central pool. The north eastern states with inadequate infrastructure for procurement have traditionally not been on the FCI radar, despite the farmers in the states are generally compelled to sell their rice crop even below the MSP.

On restructuring panel in FCI, headed by the Former Food Minister   Shanta Kumar suggested in its report that the government should focus more on north-eastern states to ensure farmers in the states to benefit from Centre’s price support mechanism.