Keypoints:
- State cabinet announced Rs 700 per quintal as paddy procurement incentive support above rate fixed by Centre as MSP.
- The incentive will be given for Kharif harvest 2020-21.
- The decision will cost the state exchequer Rs 1400 crore.
The Telangana government has been warned by the Centre 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 a minimum support price of Rs.1,888 per quintal for fine and Rs.1,868 per quintal for common variety of paddy for kharif marketing season (KMS) 2020-21.
Recently opened procurement centres in the villages received the same price being paid by the State Government.
The minimum support price was ₹1,835 and ₹1,815 per quintal respectively, which was ₹53 less than last year.
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.
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 Commissioner of Civil Supplies Akun Sabharwal and the Centre by E.K. Majhi, Additional Secretary, Department of Food and Public Distribution, represented the State.
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.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.
The State government shall procure the paddy at minimum support price (MSP) declared by the Centre from time to time.
Any incentive will be borne by the State government. “In 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.”
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.
