India to rope in private players for foodgrains procurement

The Centre will soon invite private players along with Food Corporation of India and other state agencies to procure foodgrains for buffer stock, food secretary Sudhanshu Pandey said. He informed that the Union food ministry has already written to all the state governments regarding this.

Addressing 82nd annual general meeting of Roller Flour Millers Federation of India, Pandey said that the Centre has given two clear messages to the state governments regarding procurement of foodgrains.

One is that the Centre would provide up to 2 per cent incidental expenses on the procurement undertaken by the state governments. Second, it wants to rope in private sector to buy foodgrains for the central buffer stock with an aim to improve efficiency and reduce the cost of procurement, he said.

The secretary pointed out that the procurement cost has risen as some state have imposed taxes and other charges to the tune of 6-8 per cent, which the Centre is paying currently. “We have given signal to them that GoI (Government of India) will not bear more than 2 per cent incidental expense. If state governments want to give more, (they) can do so on their own, GoI will not give. With this, the cost of procurement will reduce,” he said.

The secretary said in his recent visit to the International Grains Conference, he found that the private companies were doing procurement operations much more efficiently. Pandey, on the sidelines of the event, said: “We are going to invite private players to participate in the procurement process from next season.” According to the secretary, the FCI and state agencies procure about 90 million tonnes annually for the buffer stock, as against the demand of 60 million tonnes.

The foodgrains, mainly rice and wheat, are procured at the Minimum Support Price (MSP) directly from the farmers and distributed under welfare schemes to the poor. The states are aware that they have no option but to improve and strengthen the operational system as it will benefit all stakeholders, he added.

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