Supply Chain Council of European Union |

Centre urged to review open-ended procurement

The Commission for Agricultural Costs and Price (CACP) has again recommended that the Centre review open-ended procurement of wheat and rice, as the policy has led to excess grain stocks and affected crop diversification.

The CACP recommends minimum support prices for the notified Kharif and Rabi crops.

In its latest price policy for Kharif crops, the CACP has said, “The Commission reiterates its earlier recommendation that the Central government review the open-ended procurement policy and…restrict procurement from States like Punjab and Haryana where substantial groundwater depletion has occurred and other States that give bonus.”

Record procurement in the last two years, as a result of bumper yields, and the open-ended procurement policy have mounted an enormous pressure on the storage capacity, and will result in a higher economic cost, pushing food subsidy up, it has said.

Also read: MSP for kharif crops announced by Central government ‘inadequate’

Data showed India’s rice and wheat stocks, as on February 1, 2020, were 57.8 million tonnes (23.7% higher over the previous year) — 27.4 million tonnes of rice and 30.4 million tonnes of wheat. The rice stocks were 20.4% higher than last year and wheat stocks 26.9%. The total rice and wheat stocks were 2.7 times higher than the stocking norms for the central pool for the quarter beginning January 1, 2020. The rice stocks were 3.6 times higher and the wheat stocks 2.2 times.

Under the open-ended procurement policy, the Centre extends price support to paddy and wheat through the Food Corporation of India (FCI) and the State agencies. The wheat and paddy offered by farmers, within the stipulated period and conforming to the specifications, are bought at the minimum support price by the agencies, including the FCI, for the central pool.

The aim of procurement is to ensure that farmers get remunerative prices and do not resort to distress sale. It is also meant for supplies to the poor under the National Food Security Act and other welfare schemes and for building up buffer stocks to ensure food security.

You have reached your limit for free articles this month.

Subscription Benefits Include

Today’s Paper

Find mobile-friendly version of articles from the day’s newspaper in one easy-to-read list.

Unlimited Access

Enjoy reading as many articles as you wish without any limitations.

Personalised recommendations

A select list of articles that match your interests and tastes.

Faster pages

Move smoothly between articles as our pages load instantly.


A one-stop-shop for seeing the latest updates, and managing your preferences.


We brief you on the latest and most important developments, three times a day.

Not convinced? Know why you should pay for news.

*Our Digital Subscription plans do not currently include the e-paper ,crossword, iPhone, iPad mobile applications and print. Our plans enhance your reading experience.

Related posts

List of ‘critical businesses’ in Colorado listed on Public Health Order 20-24


Simon Moores: What to Expect at Tesla’s Battery Day and Beyond


10 questions that shape a procurement strategy