Lok Sabha Question No. 2701 (UNSTARRED), answered on 2015-12-15
Subject: Procurement Below MSP
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: CHHEDI PASWAN

## GOVERNMENT OF INDIA

## MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION

## DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION

## LOK SABHA UNSTARRED QUESTION NO. 2701

## TO BE ANSWERED ON 15 TH   DECEMBER, 2015

## PROCUREMENT BELOW MSP

## 2701. SHRI CHHEDI PASWAN:

Will  the  Minister  of  CONSUMER  AFFAIRS,  FOOD  AND  PUBLIC

DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state:

- (a) whether  the  Union  Government  and  State  Government  purchase grains below and above Minimum Support Price under specific circumstances through various agencies;
- (b) if  so,  the  details  Rice/Paddy  purchased  under  the  said  conditions during  the  last  three  years  and  the  current  year,  year  and  State-wise including Bihar;
- (c) whether the Union and State Governments have fixed any time-frame for the purchase of paddy;
- (d) if  so,  the  details  thereof  along  with  the  reasons  if  any,  for  delay  in procurement at the centres; and
- (e) whether the Government has made any evaluation of the purchase of paddy from the farmers and if so, the details and the outcome thereof?

## A N S W E R MINISTER OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION (SHRI RAM  VILAS PASWAN)

- (a)  &  (b):  There  is  a  Uniform  Policy  for  procurement  by  Govt.  Agencies across the country. Under this policy, whatever foodgrains are offered by farmers, within the stipulated period and which conform to the specifications  prescribed  by  Government  of  India  are  purchased  at Minimum Support Price (MSP) by the Government agencies including Food Corporation of India (FCI) for central pool. However, if any producer/farmer gets better price in comparison to MSP he is free to sell his produce in Open market i.e. to private trader/ anyone. Government of India (GOI) declares MSP for each season to incentivize the farmers.

However,  in  certain  circumstances  procurement  of  foodgrains  is conducted  at  a  price  higher  or  lower  than  the  minimum  support  price (MSP).  When  Govt.  (Union/State)  declares  bonus  over  and  above  MSP, foodgrains are procured at higher than MSP. When relaxations in quality specifications with certain value cut are declared, Govt. agencies procure foodgrains at a price lower than MSP imposing value cut accordingly.

No bonus over and above MSP has been declared by GOI during last three years and current year. Bonus given by different States above MSP and  quantities  of  Paddy  (in  terms  of  rice)  procured  is  enclosed  as Annexure-I.

Further,    details  of  relaxation  given  in  paddy/rice  are  enclosed  as Annexure-II.  Data  on  quantity  of  paddy  procured  with  value  cut  is maintained by State.

- (c)  &  (d):  Yes,  Madam.  For  every  marketing  season,  the  period  of procurement and the milling period (for paddy) are decided in respect of the  procuring  states  in  consultation  with  the  concerned  State  Food secretaries  keeping  in  view  the  crop  pattern,  estimates  of  production, available milling capacities etc., in a meeting convened by GOI for review of arrangement to be made for procurement in central pool.

Reasonable time period extensions for procurement and milling are also acceded to by GOI from time to time based on the proposals of state Governments citing justified and acceptable reasons. However, the state Governments  is  required  to  get  the  approval  of  GOI  in  advance  by furnishing the prescribed information along with their request for extension of milling period.

- (e): A  study  has  been  conducted  by  NITI  Ayog  on  evaluation  of  the efficacy of Minimum Support Price on farmers recently for the reference period of 2007-08 to 2010-11.

Main findings of the study are:-

- (a) The 81% of the cultivators are aware of MSP fixed for different crops in various States.
- (b) It is found that 32.13%, 41.29% and 27.4% of the farmers received their MSP payment in cash, cheque in the shape of bank deposits respectively.
- (c) 67%  of  the  farmers  sold  their  produces  through  their  own arrangements,  whereas  21%  of  them  sold  through  brokers.  The share of sales through private and Government Agencies were 8% and 4% respectively.
- (d) It is found that 78% of the farmers adopted improved methods of farming.
- (e)
- 94% of the farmers wanted MSP to continue.

****

## ANNEXURE-I ANNEXURE REFERRED TO IN REPLY TO PARTS (a) & (b) OF THE UNSTARRED QUESTION NO 2701 DUE FOR ANSWER ON 15.12.2015

## IN THE LOK SABHA

## Bonus Declared By State Government on  Paddy

## & Quatity of paddy (In terms of rice) procured at price above MSP

## Quantity in LMT

## Bonus in (Rs./Quintal)

| S.no.   | KMS          | 2012-13   | 2012-13   | 2013-14   | 2013-14   | 2014-15   | 2014-15   |
|---------|--------------|-----------|-----------|-----------|-----------|-----------|-----------|
|         | State        | Bonus     | Quantity  | Bonus     | Quantity  | Bonus     | Quantity  |
| 1       | Maharashtra  | --        |           | 200       | 1.61      | --        |           |
| 2       | Bihar        | --        |           | 250       | 9.42      | 300       | 16.14     |
| 3       | Chhattisgarh | 270       | 48.04     | 270       | 42.9      | --        |           |
| 4       | Karnataka    | 250       | 0.59      | 290       | 0         | --        |           |
| 5       | Kerala       | 450       | 2.4       | 490       | 3.59      | 540       | 3.74      |
| 6       | M.P.         | 50        | 8.98      | 150       | 10.45     | --        |           |
| 7       | Tamil Nadu   | C=50      | 4.81      | C=50      | 6.84      | C=50      | 10.51     |
| 7       | Tamil Nadu   | A=70      | 4.81      | A=70      | 6.84      | A=70      | 10.51     |

C = Common; A = Grade 'A'

KMS = Kharif Marketing Season (i.e. from October to September)

*****

## ANNEXURE-II ANNEXURE REFERRED TO IN REPLY TO PARTS (a) & (b) OF THE UNSTARRED QUESTION NO 2701 DUE FOR ANSWER ON 15.12.2015 IN THE LOK SABHA

State wise Statement showing Relaxation allowed in Uniform Specifications of Paddy during the K M S 2012 - 2013 to 2014 - 2015

| Sr.   | Year    | State          | Refractions                                          | Uniform Specificat ions   | Relaxation allowed                                                      | Relaxation allowed   | Remarks                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|-------|---------|----------------|------------------------------------------------------|---------------------------|-------------------------------------------------------------------------|----------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| No.   |         |                |                                                      | (Limit %)                 | Uniform Specification (Limit %)                                         | Out Turn Ratio%      |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 1.    | 2012-13 | Andhra Pradesh | Damaged,Disc oloured,sprou ted & Wevilled grains.    | 4.0                       | 12.0 (Damaged, sprouted & Weevilled grains together do not exceed 5.0%) | --                   | With full value cut. Relaxation allowed only for Kharif crop of KMS 2012-13 in 7 affected districts namely West Godawari, East Godawari,Srikakulam,Vijayanagram,Vishakapatna m,Krishna &Khamam. (8-2/2012-S&I dt. 11.1.13)                                                                                                                                                                                                                                  |
| 2.    | 2013-14 | Punjab         | Damaged,Disc oloured,sprou ted & Wevilled grains.    | 4.0                       | 12.0 (Damaged, sprouted & Weevilled grains together do not exceed 5.0%) | --                   | With full value cut. Relaxation allowed for KMS 2012-13 in 17 affected districts namely Amritsar, Tarantaran,Gurdaspur, Pathankot,Kapurthala, Jalandhar, Hoshiarpur, SBS Nagar, Ludhiana, Roop Nagar, Fatehgarh Sahib, Patiala, Sangrur, Barnala, Moga, Bhatinda & Mansa.(8-11/2013-S&I dt.1.11.2013)                                                                                                                                                       |
| 2.    | 2013-14 | Tamil Nadu     | Damaged, Discoloured, Sprouted and Weevilled grains. | 4.0                       | 5.0                                                                     | --                   | With full value cut. Relaxation allowed only for Kharif crop of KMS 2013-14 in 3 districts namely Nagapattinam, Thirubarur and Thanjavur of Tamil Nadu Vide letter8-10/2013 - S&I dated 10.12.2013.                                                                                                                                                                                                                                                         |
| 2.    | 2013-14 | Tamil Nadu     | Moisture content                                     | 17.0                      | 20.0                                                                    | --                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 2.    | 2013-14 | Andhra Pradesh | Damaged, Discoloured, Sprouted and Weevilled grains. | 4.0                       | 12.0 (damaged +sprouted + Weevilled grains not to exceed 5.0%)          | --                   | With full value cut. Relaxation allowed only for Kharif crop of KMS 2013-14 in 3 districts namely Karimnagar, Warangal and Naqlgonda vide letter No. 8-14/2013 - S&I dated 10.12.2013. Vide letter dated 3.1.2014 in continuation to letter dated 10.12.2013 relaxations in paddy allowed to 4 more districts namely Srikakulam, East Godawari, West Godawari and Krishna.for Kharif crop only during KMS, 2013-14 with same term and conditions.           |
| 2.    | 2013-14 | Odisha         | Damaged, Discoloured, Sprouted and Weevilled grains. | 4.0                       | 6.0 (damaged +sprouted + Weevilled grains not to exceed 5.0%)           | --                   | With full value cut. Relaxation allowed only for Kharif crop of KMS 2013-14 in 3 districts namely Baragarh, Kalahandi and Sambhalpur vide letter No. 8-6/2013 - S&I dated 03.1.2014                                                                                                                                                                                                                                                                         |
| 2.    | 2013-14 | Uttar Pradesh  | Damaged, Discoloured, Sprouted and Weevilled grains. | 4.0                       | 7.0 (damaged +sprouted + Weevilled grains not to exceed 5.0%)           | --                   | With full value cut. Relaxation allowed only for Kharif crop of KMS2013-14 in Divisions namely Allahabad, Mirzapur, Varanasi, Azamgarh, Gorakhpur, Basti, Devipatan, Meerut, Saharanpur, Moradabad, Bareilly, Agra, Aligarh,. Lucknow, Kanpur, Jhansi, and Chitrakoot vide letter No. 8- 5/2012-S&I dated 16.12.2013                                                                                                                                        |
| 3.    | 2014-15 | Uttar Pradesh  | Damaged, Discoloured, Sprouted and Weevilled grains. | 5.0                       | 7.0 (damaged +sprouted + Weevilled grains not to exceed 5.0%)           | --                   | With full value cut. Relaxation allowed only for Kharif crop of KMS 2014-15 in Divisions namely Allahabad, Azamgarh, Gorakhpur, Bareilly ( Pilibhit revenue distt. only), Shahjahanpur, Sitapur, Lucknow, Faizabad, Gonda and Varanasi in U.P. vide letter No. 8-1/2014-S&I dated 16.12.2014. The same relaxations were extended to all the districts of Kanpur Mandal for KMS 2014-15 vide letter No. 8-1/2014-S&I dated 22.1.2015 with the same terms and |

|   Sr. No . | Year    | State          | Refractions                                                | Refractions     | Uniform Specifications (Limit %)   | Relaxatio n allowed   | Remarks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|------------|---------|----------------|------------------------------------------------------------|-----------------|------------------------------------|-----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          1 | 2012-13 | Andhra Pradesh | Broken grains                                              | Raw             | 25.0                               | 30.0                  | The relaxation would be applicable without any value cut for CMR and with Half Value Cut for levy rice for Kharif crop of KMS 2012-13 in 7 affected districts namely West Godawari, East Godawari, Srikakulam,Vijayanagram, Vishakapatnam, Krishna &Khamam ( N0. 8-2/2012-S&I dt.11.1.2013)                                                                                                                                                                                                                                                                                                                                                                                                                |
|          1 | 2012-13 | Uttar Pradesh  | Damaged/slightly damaged grains including pin point grains | Raw Rice common | 3.0                                | 4.0                   | The relaxation would be applicable with full value cut for CMRand levy rice for Kharif crop only. (No. 8-5/2012-S&I dt. 20.12.2012.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|          1 | 2012-13 | Orissa         | Damaged/Slight ly damaged grains.                          | Raw             | 3.0                                | 3.5                   | Relaxation allowed in CMR of KMS 2012-13 in affected districts namely Kalahandi, Rayagada, Kopraput, Nabarangpur and other neighbouring districts in South Odisha with full                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|          1 | 2012-13 | Orissa         | Discoloured grains                                         | Raw             | 3.0                                | 5.0                   | value cut in respect of Damaged/slightly damaged grains and with Half Value cut for Broken grains vide letter No. 8- 6/2013- S&I dated 18.9.2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|          1 | 2012-13 | Orissa         | Broken grains                                              | Raw             | 25.0                               | 28.0                  | value cut in respect of Damaged/slightly damaged grains and with Half Value cut for Broken grains vide letter No. 8- 6/2013- S&I dated 18.9.2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|          2 | 2013-14 | Andhra Pradesh | Damaged/slightly damaged grains                            | Raw             | 3.0                                | 4.0                   | Relaxation allowed in raw rice milled out of relaxed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|          2 | 2013-14 | Andhra Pradesh | Broken                                                     | Raw             | 25.0                               | 30.0                  | specification paddy without any value cut in case of CMR and with full value cut in case of levy rice in r/o Damaged/ slightly damaged grains and at the rate of half value cut in r/o broken grains, only for Kharif crop of KMS 2013-14 in 3 districts namely Karimnagar, Warangal and Nalgonda vide letter No. 8-14/2013-S&I dated 10.12.2013. In continuation to letter dated 10.12.2013, Vide letter dated 3.1.2014 relaxations in raw rice extended to 4 more districts namely Srikakulam, East Godawari, West Godawari and Krishna for Kharif crop only during KMS 2013-14 with same terms and conditions. However, district wise quality of rice to be procured under relaxed norms was specified. |
|          2 | 2013-14 | Uttar Pradesh  | Damaged/slightly damaged grains                            | Raw             | 3.0                                | 4.0                   | Relaxation allowed in raw rice milled out of relaxed specification paddy without any value cut in case of CMR and with full value cut in case of levy rice for KMS 2013-14 in Divisions namely Faizabad,, Allahabad, Mirzapur, Varanasi, Azamgarh, Gorakhpur, Bast, devipattan, Meerut,Saharanpur, Moradabad, Bareilly, Agra, Aligarh, Lucknow, Kanpur, Jhansi & Chitrakoot vide letter No. 8-5/2012-S&I dated 16.12.2013. Rice procured under relaxed norms will be used by State agencies.                                                                                                                                                                                                               |
|          2 | 2013-14 | Haryana        | Damaged/slightly damaged grains                            | Raw             | 3.0                                | 4.0                   | Relaxation allowed with full value cut in balance quantity of Custom Milled raw rice of KMS 2013-14 in 4 districts namely Karnal, Kurukshetra, Yamuna Nagar and Palwal vide letter No. 8-13/2013-S&I dated 2 nd Jan. 2014 and in continuation to this letter relaxatuion were extended to 3 more districts namely Ambala,, Panchkula & Guhla cheeka belt of Kaithal districts for balance quantity of CMR rice with same terms & conditions vide letter dated 10.1.2014. Again vide letter dated 5.2.2014 relaxation in rice were extended to Dhand centre of K aithal district and Narwana centre of Jind District for balance quantity of Custom Milled raw rice with same terms and conditions.         |
|          2 | 2013-14 | Orissa         | Damaged/slightly damaged grains                            | Raw             | 3.0                                | 4.0                   | Relaxation allowed in raw rice milled out of relaxed specification paddy without any value cut in case of CMR and with full value cut in case of levy rice only for Kharif crop of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|          2 | 2013-14 | Orissa         | Discoloured grains                                         | Parboiled rice  | 5.0                                | 7.0                   | KMS 2013-14 in 3 districts namely Baragarh, Kalahandi and Sambhalpur vide letter No. 8-6/2013-S&I dated 3.1.2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|          3 | 2014-15 | Uttar Pradesh  | Damaged/slightly damaged grains                            | Raw             | 3.0                                | 4.0                   | Relaxation allowed in raw rice milled out of relaxed specification paddy without any value cut in case of CMR and with full value cut in case of levy rice only for Kharif crop of KMS 2014-15 in Divisions namely Allahabad, Azamgarh, Gorakhpur, Bareilly ( Pilibhit revenue distt. only), Shahjahanpur, Sitapur, Lucknow, Faizabad, Gonda and Varanasi in U.P. vide letter No. 8-1/2014-S&I dated 16.12.2014.The same relaxations were extended to all the districts of Kanpur Mandal for KMS 2014-15 vide letter No. 8-1/2014-S&I dated 22.1.2015 with the same terms and conditions.                                                                                                                  |
|          3 | 2014-15 | Andhra Pradesh | Broken                                                     | Raw             | 25.0                               | 30.0                  | The relaxation would be applicable with half value cut for CMR and levy rice for Kharif crop of KMS 2014-15 in affected districts namely Srikakulam and Vijayanagram. ( 8-5/2014-S&I dt.19.1.2014)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|          3 | 2014-15 |                |                                                            |                 |                                    | 4.0                   | N0. Relaxation has been allowed with full value cut for 37375 of Custom Milled Raw Rice due from KMS 2014-15                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|          3 | 2014-15 |                | Damage/slightly damage grains                              | Raw             | 3.0                                |                       | tons in Central Delta Area of East Godavari District (No. 8-5/2014- S&I dated 17.08.2015)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |