Lok Sabha Question No. 3645 (UNSTARRED), answered on 2015-08-11
Subject: Procurement at Higher Price
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: CHANDRA PRAKASH JOSHI, P.P. CHAUDHARY

## GOVERNMENT OF INDIA MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION

## LOK SABHA UNSTARRED QUESTION NO. 3645 TO BE ANSWERED ON 11 TH  AUGUST, 2015

## PROCUREMENT AT HIGHER PRICE

3645. SHRI CHANDRA PRAKASH JOSHI: SHRI P.P. CHAUDHARY:

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  and  the  State  Governments  through  various agencies procure foodgrains at prices lower or higher than the Minimum Support Price (MSP) under specific circumstances;
- (b) if  so,  the  details  thereof  indicating  the  quantum  and  the  price  of produce so procured during the last three years;
- (c) whether  any  order  had  been  issued  to  buy  lustre  less  wheat  at relaxed quality norms;
- (d) if  so, the details thereof indicating the below average quality wheat bought following the said order;
- (e) whether the Union and the State Governments have compensated the losses incurred by the procurement agencies for such procurement; and
- (f) if  so,  the  details  of  the  total  procurement  made  along  with  the amount spent by the States and the Centre in this regard during the said period?

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

(a): Yes,  Madam.  Under  specific  circumstances,  when  relaxations  in quality  specifications  with  certain  value  cut  are  declared  by  the  Central Government, Government agencies procure foodgrains at price lower than Minimum Support Price (MSP) imposing value cut accordingly.

## (b): The quantum of wheat procured under relaxed specifications (URS) during the last three years are as under-

(in lakh MT)

| Rabi Marketing Season (RMS)   |   Procurement |
|-------------------------------|---------------|
| 2013-14                       |             0 |
| 2014-15                       |          2.17 |
| 2015-16                       |        266.26 |

The information about quantum of paddy/rice procured under relaxed specification during last three years is being collected.

MSP of wheat and paddy/rice with value cut imposed for URS during last three years and current year is enclosed as Annex-I.

(c) & (d): Yes,  Madam. During the current Rabi Marketing Season (RMS) 2015-16,  due  to  unseasonal  &  intermitted  rains    relaxation  in  uniform specifications of wheat have been allowed to the State of Gujarat, Madhya Pradesh, Rajasthan, Punjab, Haryana, Uttar Pradesh and Chandigarh (Union Territory).  Details of the relaxation granted to the States are at Annex-II. The  below  average  quality  wheat  under  URS  bought  following  the  said order during RMS 2015-16 is 266.26 lakh MT.

(e)&(f): In this regard it is submitted that for RMS 2015-16, keeping in view  the  damage    to  wheat  crop  due  to  adverse  weather  condition, Government of India (GOI) has decided to reimburse the  amount of valuecut  to  be  borne  by  State  Govt./Agencies  through    FCI  after  end  of procurement operations to the concerned State Government/Agencies on submission  of  bill  alongwith  supporting  documents.  In  case  of  States which  have  adopted  Decentralized  Procurement  Scheme  (DCP),  the  GOI has decided to reimburse the amount directly by the Department of Food & Public Distribution on submission of claim by the State Government/Agencies.

The State-wise details of total procurement of wheat under relaxed specification made during RMS 2015-16 are at Annex-III. The amount spent by the States and the Centre towards value cut is not known at this stage as accounts have not been finalized.

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## ANNEX-I

## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PART  (b)  OF  THE  UNSTARRED QUESTION NO. 3645 DUE FOR ANSWER ON 11.08.2015 IN THE LOK SABHA

MSP of Paddy with value cut imposed for URS during last three years.

(in Rs. per quintal )

| KMS     | MSP    | MSP       | Reduction in MSP for one full value cut.*   | Reduction in MSP for one full value cut.*   |
|---------|--------|-----------|---------------------------------------------|---------------------------------------------|
|         | Common | Grade 'A' | Common                                      | Grade 'A'                                   |
| 2012-13 | 1250   | 1280      | 12.50                                       | 12.80                                       |
| 2013-14 | 1310   | 1345      | 13.10                                       | 13.45                                       |
| 2014-15 | 1360   | 1400      | 13.60                                       | 14.00                                       |

*If 1 % of relaxation is allowed with one full value cut then 1 % of MSP is reduced. However, in case more than 1% of relaxation is allowed with full value cut then reduction in MSP also increases proportionately.

MSP of Wheat with value cut imposed for URS during last three years.

(in Rs. per quintal )

| RMS     | MSP   | Reduction in MSP                              | Reduction in MSP                       | Reduction in MSP                       | Reduction in MSP                                                                                     | Reduction in MSP                                                                                       |
|---------|-------|-----------------------------------------------|----------------------------------------|----------------------------------------|------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|
| RMS     | MSP   | Luster lost wheat                             | Wheat shriveled broken grains          | with and                               | Luster lost wheat with and broken grains                                                             | shriveled                                                                                              |
| RMS     | MSP   | Above10% and upto 50% 1/4 th of one value cut | Above 6% and upto 8%                   | Above 8% and upto 10%                  | Wheat with lustre loss of above 10% & upto 50% with shriveled and broken grains above 6% and upto 8% | Wheat with lustre loss of above 10% & upto 50% with shriveled and broken grains above 8% and upto 10%. |
| 2013-14 | 1350  | No relaxation allowed during the year.        | No relaxation allowed during the year. | No relaxation allowed during the year. | No relaxation allowed during the year.                                                               | No relaxation allowed during the year.                                                                 |
| 2014-15 | 1400  | 3.50*                                         | Not applicable                         | Not applicable                         | Not applicable                                                                                       | Not applicable                                                                                         |
| 2015-16 | 1450  | 3.63                                          | 3.63                                   | 7.25                                   | 7.26(3.63+3.63)                                                                                      | 10.89 (7.26+3.63)                                                                                      |

*In RMS 2014-15 relaxations was allowed to only State of Madhya Pradesh. Upto 10.0% without value cut and above 10% to 20% of lustre lost 1/4 th of one full value cut was imposed.

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## ANNEXURE REFERRED TO IN REPLY TO PART (c) & (d) OF THE UNSTARRED  QUESTION  NO.  3645  DUE  FOR  ANSWER  ON 11.08.2015 IN THE LOK SABHA

## State wise Relaxation allowed to States in specifications of wheat  during RMS 2015-16

| State          | Refractions                                                                                                                                                                                                       | Refractions                                                                                                                  |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------|
|                | Shrivelled and Broken grains                                                                                                                                                                                      | Luster Lost grains                                                                                                           |
| Gujarat        | -                                                                                                                                                                                                                 | (i) Upto 10% without value cut. (ii) Above 10 upto 25% with ¼ th of one value cut on flat basis or say Rs. 3.63 per quintal. |
| Madhya Pradesh | Upto 10% with value cut @ ¼ th of one value cut for every additional relaxation of 2% or part thereof, i.e. for above 6 upto 8% Rs.3.63 per quintal and for above 8 upto 10% Rs 7.25 per qtl. will be deducted.   | i) Upto 10% without value cut. ii) Above 10 upto 40% with ¼ th of one value cut on flat basis or say Rs. 3.63 per quintal.   |
| Rajasthan      | Upto 9% with value cut @ ¼ th of one value cut for every additional relaxation of 2% or part thereof, i.e. for above 6 upto 8% @ Rs.3.63 per quintal and for above 8 upto 9% @ Rs 7.25 per qtl. will be deducted. | i) Upto 10% without value cut. ii) Above 10 upto 50% with ¼ th of one value cut on flat basis or say Rs. 3.63 per quintal.   |

| Haryana*                | Upto 10% with value cut @ ¼ th of one value cut for every additional relaxation of 2% or part thereof, i.e. for above 6 upto 8% @ Rs.3.63 per quintal and for above 8 upto 10% @ Rs 7.25 per qtl. will be deducted   | i) Upto 10% without value cut ii)Above 10 upto 95% in Kaithal district, upto 90% in Mewat, Sonipat, Jind, Palwal, Faridabad & Kurkshetra districts, upto 80% in Karnal, Hissar, Fatehabad & Panipat districts and upto 50% in rest of the States with ¼ th of one value cut on flat basis or say Rs. 3.63 per quintal.   |
|-------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Uttar Pradesh           | Upto 10% with value cut @ ¼ th of one value cut for every additional relaxation of 2% or part thereof, i.e. for above 6 upto 8% Rs.3.63 per quintal and for above 8 upto 10% Rs 7.25 per qtl. will be deducted.      | i) Upto 10% without value cut. ii) Above 10 upto 50% with ¼ th of one value cut on flat basis or say Rs. 3.63 per quintal.                                                                                                                                                                                               |
| Punjab*                 | Upto 10% with value cut @ ¼ th of one value cut for every additional relaxation of 2% or part thereof, i.e. for above 6 upto 8% Rs.3.63 per quintal and for above 8 upto 10% Rs 7.25 per qtl. will be deducted.      | i) Upto 10% without value cut ii) Above 10 upto 50% with ¼ th of one value cut on flat basis or say Rs. 3.63 per quintal.                                                                                                                                                                                                |
| Uniform specificati ons | 6%                                                                                                                                                                                                                   | Full Luster                                                                                                                                                                                                                                                                                                              |

*Wheat  can  be  procured  with  damaged  and  slightly  damaged grains  put  together  upto  6%  with  the  condition  that  damaged grains alone may not be exceed more than 4%.

The  relaxation  in  wheat  specifications  allowed  in  case  of Punjab has also been extended to UT Chandigarh.

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ANNEXURE  REFERRED  TO  IN  REPLY  TO  PARTS  (e)  &  (f)  OF  THE UNSTARRED QUESTION  NO.  3645  DUE  FOR  ANSWER  ON  11.08.2015  IN THE LOK SABHA

The details  of  the  procurement  of  below  average  quality  wheat  under  URS    in  RMS 2015-16 is as  follows:-

(Figs in MT)

| State            | URS     | URS      | URS      |
|------------------|---------|----------|----------|
|                  | FCI     | State    | Total    |
| PUNJAB           | 1758612 | 8197016  | 9955628  |
| HARYANA          | 0       | 6753095  | 6753095  |
| U.P.             | 139418  | 1933679  | 2073097  |
| M.P.             | 0       | 6509167  | 6509167  |
| BIHAR            | 0       | 0        | 0        |
| RAJASTHAN        | 945564  | 345400   | 1290964  |
| UTTRAKHAND       | 0       | 0        | 0        |
| CHANDIGARH       | 3939    | 0        | 3939     |
| DELHI            | 0       | 0        | 0        |
| GUJARAT          | 0       | 40294    | 40294    |
| JHARKHAND        | 0       | 0        | 0        |
| MAHARASHTRA      | 0       | 0        | 0        |
| HIMACHAL PRADESH | 0       | 0        | 0        |
| J&K              | 0       | 0        | 0        |
| WEST BENGAL      | 0       | 0        | 0        |
| TOTAL            | 2847533 | 23778651 | 26626184 |

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