The Central government to invite private players in grain procurement
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New Delhi, Sept 20: The Centre will soon invite private players along with the Food Corporation of India and other state agencies to procure foodgrains for buffer stock, food secretary Sudhanshu Pandey said on Monday.
He informed that the Union food ministry has already written to all the state governments regarding this.
Addressing the 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 the procurement of foodgrains.
One is that the Centre would provide up to 2 percent incidental expenses on the procurement undertaken by the state governments. Second, it wants to rope in the private sector to buy foodgrains for the central buffer stock with an aim to improve efficiency and reduce the cost of procurement, he said. “We also want to involve the private sector in the procurement process. Why only FCI and state agencies should be procuring?” he asked. 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. The government has no problem if private player procures foodgrains at less cost and more efficiently than the existing agencies, he said “We have written to states that the government wants to bring the private sector in the procurement process besides FCI and state agencies,” he added. 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, against the demand of 60 million tonnes. The foodgrains, mainly rice and wheat, are procured directly from the farmers at the Minimum Support Price (MSP) and distributed under welfare schemes to the poor. On reducing the cost of procurement, Pandey said the state governments have been told clearly that the central government will not bear the incidental expense of more than 2 percent. “We have signaled to them that GoI (Government of India) will not bear more than 2 percent 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 pointed out that the procurement cost has risen as some states have imposed taxes and other charges to the tune of 6-8 percent, which the Centre is paying currently.
“This has increased the cost of procurement and hurt consumers and industries. This message has been given to the states and this will be implemented soon,” he said, the matter is at the discussion stage currently. Pandey also mentioned this decision the Centre does not want to take up abruptly as the states have limited financial resources. However, the states need to understand that it cannot be left open-ended. He also observed that procurement operation in some states is efficient but not so in many states. Pandey warned that the Centre will not bear even 2 percent incidental expenses if the states do not improve the procurement system. 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.