Agri societies flout MSP rule, purchase grain from private trade
By Sandip Das
The skewed nature of grain procurement has been the principal reason why support prices for farmers produced less-than-optimal results in boosting farmers’ income. This systemic malaise has come to the fore again. In a recent inspection of the primary agricultural co-operative societies (PACS) by the Union food ministry officials, these bodies were found to purchase grains from the private trade in large quantities, leaving farmers high and dry.
Sources told FE that in a surprise visit to a storage facility in Buxar in the state recently, officials found PACS godowns storing wheat purchased from private traders (rather than farmers). “Under the rules, PACS cant get engaged in private purchase and we have asked the state government to take action so that local procurement of grain get a boost,” a source said.
In the rabi marketing season – 2024-25 (April-June), only 7280 tonne of wheat has been purchased from farmers in Bihar by PACS so far against the target of 0.2 million tonne (MT) for the season. “With such a sluggish approach, there is hardly any prospects of substantial wheat procurement this season in the state,” a source said.
Bihar produced 6.22 MT of wheat, which was 6% of the country’s wheat output of 107.7 MT in the 2021-22 crop year (July-June). However, the purchases by agencies during the 2022-23 marketing season (April-June) in the state was only 4000 tonne.
The state started to contribute to central pool purchase of wheat from the 2018-19 marketing year where only 18,000 tonne was purchased by agencies.
States such as Uttar Pradesh, Bihar and Rajasthan have been contributing much less to the procurement by agencies. In the ongoing marketing season, the food ministry has set a target of atleast 5 MT of wheat procurement from the three non-traditional procurement states. However last marketing year (2023-24) these three states contributed only 0.67 MT of wheat to the central pool.
Under the decentralised procurement system, the government has been encouraging states – Bihar, Uttar Pradesh, Rajasthan, West Bengal and others to procure foodgrains at MSP which could be distributed locally under the public distribution system. Officials said the aim is to ensure remunerative prices for the farmers as well as saving costs because of transportation of grains from surplus states such as Punjab, Haryana and Andhra Pradesh
Meanwhile, the government wheat procurement drive by the Food Corporation of India and state agencies for the current marketing season has crossed 22.10 MT till Thursday since purchase under the MSP officially commenced on April 1. The wheat purchase so far is 5% lower than the same period.
Punjab (10.64 MT), Haryana (6.52 MT) and Madhya Pradesh so far have contributed 95% of the total wheat purchase by agencies. The government is aiming to purchase around 30 MT of wheat from farmers in the ongoing season so that there are sufficient stock for carrying out open market sale after supplying grain to beneficiaries under Pradhan Mantri Garib Kalyan Anna Yojana.
After achieving a record procurement 43.3 MT in 2021-22 season, the purchase by the government agencies under the MSP operations fell to record low of 18.8 MT in 2022-23 season. However, it rose by around 40% to 26.2 MT in 2023-24.
This article has been republished from The Financial Express.