Centre warns State on incentive for paddy


The Centre has strictly warned the Telangana government that any bonus or financial incentive declared by the latter in procurement of paddy from farmers over and above the minimum support price (MSP) shall be borne by the State.

The Centre had fixed an minimum support price of โ‚น1,888 per quintal for fine and โ‚น1,868 per quintal for common variety of paddy for kharif marketing season (KMS) 2020-21.

The same price was being paid by the State government at procurement centres, recently opened in villages.

The minimum support price was โ‚น1,835 and โ‚น1,815 per quintal respectively, which was โ‚น53 less than last year.

Targeting the Centre, Chief Minister K. Chandrasekhar Rao told the public meeting at Kodakandla on Saturday that the State government was restrained from paying the bonus or incentive in these circumstances.

As part of its procurement policy, the Food Corporation of India (FCI) will lift minimal stocks from states if they resorted to payment of bonus or incentive over and above the minimum support price.

The excess payment will anyway have to be borne by the State governments. On prompt payment of minimum support price, however, the Food Corporation of India adopted a flexible approach to purchase more than the allocations to states to build buffer stocks for supplies across the country.

Strict norms

The strict norms of adherence to minimum support price were spelt out in a memorandum of understanding (MoU) of decentralised procurement of paddy and delivery of custom milled rice between the Telangana government and the Centre on September 17.

The State was represented by Commissioner of Civil Supplies Akun Sabharwal and the Centre by E.K. Majhi, Additional Secretary, Department of Food and Public Distribution.

According to the MoU, the State government shall undertake procurement of paddy/custom milled rice on behalf of the Centre directly for contribution to the Central pool from KMS 2019-20 onwards. Before commencement of the KMS, the State government must declare the quantity it intended to retain as decentralised procurement stock for distribution out of the Central pool.

Paddy should be procured by State government at minimum support price (MSP) declared by Centre from time to time.

Any incentive will be borne by the State government. โ€œIn the situation of the State giving any bonus/financial incentive, in direct or indirect form over and above the minimum support price (MSP), if the overall procurement of the State is in excess of the total allocation of the State made by the Government of India under Telangana Public Distribution System/other welfare schemes, such excess quantity shall be treated to be outside the Central pool.โ€

The MoU said that the State government shall ensure thta the total off take/distribution of rice was within the total allocations made by the Central government.

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