NEW DELHI, 13 JULY: Close on the heels of reaching an agreement on the food security Bill, the ministries of agriculture and food and consumer affairs are locked in a “fresh round of confrontation” over the procurement policy.
According to sources, the agriculture ministry headed by NCP strongman Mr Sharad Pawar has taken a pro-farmer stance and favoured continuing the existing ‘open-ended policy’ on foodgrain procurement, meaning “no limit” to procurement by government agencies on minimum support price (MSP). On the other hand, the consumer affairs ministry headed by Congress president Sonia Gandhi’s trusted lieutenant Mr K V Thomas, wants “some cap” in the procurement policy.
“The food and consumer affairs ministry want some checks and balances in procurement. Higher production after bumper harvests often results in extraordinary increase in procurement and the government faces multiple problems, including storage,” sources said, adding that recently huge quantities of foodgrains have got wasted due to storage problems.
In recent months, in the run up to the preparation for pushing the food security Bill, the food ministry has expressed concern over the role of states in procuring foodgrains.
While on one hand the country has witnessed record production of foodgrains in recent years, the offtake from states has been poor. “The poorer offtake by states often threatens the very commitment to provide subsidised foodgrains to the targeted beneficiaries,” sources said.
Officials in the ministry of food and consumer affairs said a cap in procurement policy could open some room for “private players to buy directly from the farmers”. Currently, the FCI buys grains brought to it on the procurement price fixed by the government on the basis of the minimum support price for wheat and paddy.
According to commodity market watchers, higher MSP over the last few years, coupled with better outreach has led to higher procurement. As a result, the central pool stock had increased from 196.38 lakh MTs as on April 2008 to a peak level 823.17 lakh MTs in June 2012.