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NEW DELHI: The two principal political parties announcing “bonus” over the minimum support price (MSP) for wheat and paddy in their assembly election campaigns in Madhya Pradesh and Chhattisgarh will face huge challenge to keep their promise after coming to power as the food ministry will not take any extra grain from such states beyond its requirement for the public distribution system and maintaining of buffer stock.
As per the memorandum of understanding (MoU) signed between the food ministry and states, if any state gives financial incentive (bonus) in direct or indirect form, over and above the MSP, and if the overall procurement of the state is in excess of the total allocation made by the government under PDS, such excess quantity will be treated to be outside the “central pool”. The Food Corporation of India (FCI) maintains the central pool of foodgrains.
Both MP and Chhattisgarh are surplus states, meaning they procure more than what they require for their needs under the PDS and other welfare schemes.
However, officials said that the state governments in past have taken cue from the Centre to convert the bonus to schemes something akin to the PM Kisan implemented by the central government. Officials said states can opt for providing indirect financial incentive based on land holding to farmers as being done under the schemes such as ‘Kalia’ in Odisha and ‘Rythu Bandhu’ in Telangana. “For voters and farmers, political parties announce the bonus for their easy understanding whereas for implementation, they have come up with a scheme,” said an official.
In Madhya Pradesh, BJP has announced procurement of wheat at Rs 2,800 per quintal, including the MSP of Rs 2,125. For paddy, the saffron party has promised to procure the foodgrain at Rs 3,100 a quintal against the current MSP of Rs 2,183 in MP and Chhattisgarh as well. Similarly, Congress has promised paddy procurement at Rs 3,000 per quintal in Chhattisgarh.
The two poll-bound states have a significant share in procurement of paddy and wheat under the Centre’s MSP operations as they have stepped up purchase operations at local level. MP purchased over 70 lakh tonnes of wheat in 2023-24 Rabi marketing season (April-June), which is 27% of total purchase of 260 lakh tonnes across major producing states. Similarly, Chhattisgarh in the 2022-23 Kharif marketing season (October-September) procured nearly 59 lakh tonnes of rice, nearly 10% of the government’s total purchase across key producing states.
Officials said that when Chhattisgarh announced Rajiv Gandhi Kisan Nyay Yojana in 2020 to procure paddy from the farmers at Rs 2,500 by paying Rs 10,000 per acre, the Centre had raised objections flagging that this was a form of “indirect incentive over and above the MSP which is as good as bonus on procurement of paddy”. Subsequently, the state extended the incentive to all the crops to avoid any restriction in procurement of paddy by the Central government.
As per the memorandum of understanding (MoU) signed between the food ministry and states, if any state gives financial incentive (bonus) in direct or indirect form, over and above the MSP, and if the overall procurement of the state is in excess of the total allocation made by the government under PDS, such excess quantity will be treated to be outside the “central pool”. The Food Corporation of India (FCI) maintains the central pool of foodgrains.
Both MP and Chhattisgarh are surplus states, meaning they procure more than what they require for their needs under the PDS and other welfare schemes.
However, officials said that the state governments in past have taken cue from the Centre to convert the bonus to schemes something akin to the PM Kisan implemented by the central government. Officials said states can opt for providing indirect financial incentive based on land holding to farmers as being done under the schemes such as ‘Kalia’ in Odisha and ‘Rythu Bandhu’ in Telangana. “For voters and farmers, political parties announce the bonus for their easy understanding whereas for implementation, they have come up with a scheme,” said an official.
In Madhya Pradesh, BJP has announced procurement of wheat at Rs 2,800 per quintal, including the MSP of Rs 2,125. For paddy, the saffron party has promised to procure the foodgrain at Rs 3,100 a quintal against the current MSP of Rs 2,183 in MP and Chhattisgarh as well. Similarly, Congress has promised paddy procurement at Rs 3,000 per quintal in Chhattisgarh.
The two poll-bound states have a significant share in procurement of paddy and wheat under the Centre’s MSP operations as they have stepped up purchase operations at local level. MP purchased over 70 lakh tonnes of wheat in 2023-24 Rabi marketing season (April-June), which is 27% of total purchase of 260 lakh tonnes across major producing states. Similarly, Chhattisgarh in the 2022-23 Kharif marketing season (October-September) procured nearly 59 lakh tonnes of rice, nearly 10% of the government’s total purchase across key producing states.
Officials said that when Chhattisgarh announced Rajiv Gandhi Kisan Nyay Yojana in 2020 to procure paddy from the farmers at Rs 2,500 by paying Rs 10,000 per acre, the Centre had raised objections flagging that this was a form of “indirect incentive over and above the MSP which is as good as bonus on procurement of paddy”. Subsequently, the state extended the incentive to all the crops to avoid any restriction in procurement of paddy by the Central government.
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