Hyderabad: The Centre will withdraw from the exercise of purchasing foodgrain from farmers and leave it to state governments along with some subsidy.
According to the recommendations of the Shanta Kumar committee, the Centre has decided not to purchase output from farmers at the Minimum Support Price. Instead, it proposes to give 30 per cent subsidy to state governments to purchase agri produce.
In the normal course, the Centre purchases commodities through the Food Corporation of India (FCI) from farmers at the MSP. This is to compensate farmers for any unexpected drop in open market price of commodities.
The Centre had constituted a high-level committee on restructuring the Food Corporation of India under the chairmanship of former Himachal Pradesh chief minister Shanta Kumar, who is also a former Union minister for consumer affairs. The committee submitted its report to Prime Minister Narendra Modi on January 21, 2015.
The Centre has decided to implement the report after three years. Accordingly, it has sent a letter to state governments stating that the FCI would not purchase foodgrains from farmers and state governments would have to do the buying. The Centre would give 30 per cent subsidy for the purchases.
MSP to farmers for their crops has become an annual issue and at times political parties use this for their political advantage.
The Shanta Kumar Committee said in its report, “If state governments pay additional bonus over and above the MSP to its farmers mainly for vote bank politics, FCI should not procure more grain from the state. For vote bank politics, the Centre always increases MSP for wheat and rice each year.”
The committee said states like AP, Chhattisgarh, Haryana, Madhya Pradesh, Odisha and Punjab had gained sufficient experience in procurement operations and created reasonable infrastructure.
Punjab opposed the Centre’s proposal and said it would prove very harmful to the farming community.
TS agriculture department secretary C. Parthasaradhi said the Centre would give 30 per cent subsidy which was meagre. Instead it should be raised to 50 per cent.
He said the Centre was holding a meeting with the officials of state governments on January 20 in New Delhi to discuss the issue. He expressed the hope that the Centre might increase the subsidy to 40 per cent.
