Ministry of Consumer Affairs, Food & Public Distribution

In ongoing KMS 2022-23, MSP of Rs.

159,659.59 Crores paid for paddy procurement
benefitting 1,12,96,159 farmers
Posted On: 26 MAY 2023 2:22PM by PIB Delhi

The Government policy of procurement of paddy has broad objectives of ensuring MSP to the
farmers and availability of food to the weaker sections at affordable prices. It also ensures effective
market intervention thereby keeping the prices under check, also adding to the overall food security
of the country.

During the Kharif Marketing Season (KMS) 2022-23, (upto 22.05.2023), the production of rice is
1308.37 LMTs (as per second advance estimate), procurement estimate of rice is 626.06 LMTs and
quantity of rice procured is 520.63 LMTs. In KMS 2022-23 (upto 22.05.2023), this has led to MSP
payment of Rs.159,659.59 Crores and benefited 1,12,96,159 farmers.
FCI, the nodal central agency of Government of India, along with other State Agencies undertakes
procurement of paddy under price support scheme. The procurement operations are majorly
carried out by State Govts and its agencies.

Before the harvest, during each Rabi / Kharif Crop season, the Government of India declares the
minimum support prices (MSP) for procurement on the basis of the recommendation of the
Commission of Agricultural Costs and Prices (CACP) which along with other factors, takes into
consideration the cost of various agricultural inputs and the reasonable margin for the farmers for
their produce. MSP (Minimum Support Price) operations are given wide publicity through
pamphlets, banners, sign boards, radio, TV and advertisements through print & electronic media.

Farmers are made aware of the quality specifications and purchase system etc. to facilitate the
farmers to bring their produce conforming to the specifications. Procurement centres are
opened by respective State Govt. Agencies/FCI taking into account the production, marketable
surplus, convenience of farmers and availability of other logistics / infrastructure such as storage
and transportation etc., large number of temporary purchase centres in addition to the existing
Mandis and depots/godowns are also established at key points, for the convenience of the farmers.

To further strengthen the system such that the farmers directly get the MSP announced by
Government of India, “One Nation, One MSP through DBT” implemented across the country from
RMS 2021-22 onwards. Payment of MSP has been ensured directly into farmers' accounts. DBT
eliminated fictitious farmers and reduced the diversion and duplication of payment as payment is
being made directly to farmer's bank account. DBT of MSP has brought in responsibility,
transparency and probity.

FCI and most of the State Governments have developed their own Online Procurement System
which ushers in transparency and convenience to the farmers through proper registration and
monitoring of actual procurement. Through an e-procurement module deployed by procuring
Agencies, farmers get latest/updated information regarding MSP declared, nearest purchase centre,
date of procurement etc. This not only has reduced the waiting period for delivery of stock by the
farmers but also enables the farmer to deliver stock as per his convenience in the nearest mandi.

Paddy brought to the Purchase centres which are within the prescribed specifications, are
purchased at the fixed Minimum Support Price. If the farmers get prices better than the support
price from other buyers such as traders / millers etc., they are free to sell their produce to them.
FCI and the State Government/agencies ensure that the farmers are not compelled to sell their
produce below support price.

Systems of procurement:
Paddy is procured under Centralized and Decentralized procurement systems.

Centralized (Non-DCP) procurement system:

Under the centralized procurement system, the procurement of food grains in Central Pool is
undertaken either by FCI directly or by State Govt. Agencies (SGA). Quantity procured by SGAs
is handed over to FCI for storage and subsequent issue against GOI allocations in the same State or
movement of surplus stocks to other States. The cost of the food grains procured by State agencies
is reimbursed by FCI as per Provisional per cost-sheet issued by GOI as soon as the stocks are
delivered to FCI.

Decentralized (DCP) Procurement

The scheme of Decentralized Procurement of food grains was introduced by the Government in
1997-98 with a view to enhancing the efficiency of procurement and PDS and encouraging local
procurement to the maximum extent thereby extending the benefits of MSP to local farmers as
well as to save on transit costs. This also enables procurement of food grains more suited to the
local taste. Under this scheme, the State Government itself undertakes direct purchase of
paddy/rice and wheat and also stores and distributes these food grains under NFSA and other
welfare schemes. The Central Government undertakes to meet the entire expenditure incurred by
the State Governments on the procurement operations as per the approved costing. The Central
Government also monitors the quality of food grains procured under the scheme and reviews the
arrangements made to ensure that the procurement operations are carried smoothly. The names of
states which have signed the MOU with Government of India to adopt DCP mode for procurement
of rice is as under:

DCP for Rice

S.N. State With Effect From

1 Uttrakhand 2002-03

2 Chhattisgarh 2001-02

3 Odisha 2003-04

4 Tamil Nadu 2002-03

5 West Bengal 1997-98

6 Kerala 2004-05

7 Karnataka 2009-10

8 Madhya 2007-08

Pradesh

9 Andhra Pradesh Fully DCP from KMS 2015-16.

10 Bihar 2013-14

11. Telangana Fully DCP from KMS 2014-15.

12. Maharashtra 2016-17

13. Jharkhand 2016-17(only for 1 district) 2017-18 (only for 5 District), 2018-19
onwards (only for 6 District)

and from KMS 2022-23 fully DCP.

14. Gujarat 2017-18

15. Tripura For 2018-19 and 2019-20 (Rabi crop only) and From 2020-21
(Kharif & rabi crop)

16 Himachal HP has adopted DCP scheme from KMS 2022-23

Pradesh
Minimum Support Prices:
The Minimum Support Price (MSP) for paddy is fixed by the Department of Agriculture &
Cooperation, GOI on the recommendations of the CACP. MSP of paddy during KMS 2018-19 to
KMS 2022-23 is as under:

(Rs. per quintal)

Marketing year Paddy- Paddy-

Common Grade “A”

KMS 2018-19 1750 1770

KMS 2019-20 1815 1835

KMS 2020-21 1868 1888

KMS 2021-22 1940 1960

KMS 2022-23 2040 2060

Quantity of Paddy (in terms of rice) Procured, MSP payment and no. of farmers benefited during
previous years are as under:

KMS Production in No. of MSP value

terms of Quantity of rice Farmers (in Rs.
rice (in procured (in benefited
Crores)
LMTs) LMT)

2018-19 1164.79 443.99 9705105 116,838.72

2019-20 1188.70 518.27 12459354 141,465.94

2020-21 1243.68 601.73 13112282 169,099.84

2021-22 1294.71 575.88 12679650 168,031.12

2022-23

(upto 1308.37 520.63 11296159 159,659.59

22.05.23)
 *****

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