Supply Chain Council of European Union | Scceu.org
Procurement

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.

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