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FCI pays 30% less, forces distress sale by Sidhartha & Surojit Gupta


Farmers across the country are entitled to get Rs 1,080 a quintal (100kg) asminimum support price for paddy. But surprisingly, a team from the Centre that visited Bihar and Uttar Pradesh last week found that theFood Corporation of India (FCI) was paying nearly 30% less.

With little procurement taking place in these states, farmers have been left with no option but to go for distress sale. The result: In procurement centres such as Raia in Allahabad, farmers were being paid Rs 750-800 a quintal by FCI. In neighbouring Sultanpur's Ramganj, the rate paid for paddy was marginally better, at Rs 775-825 a quintal. In Bihar, from Muzaffarpur to Motihari, the situation was only marginally better, with procurement taking place at anywhere between Rs 800 and 850 a quintal.

"When we reached some of the procurement centres, farmers came to us requesting help in ensuring that their produce was procured by a government agency," said a member of the team from Commission for Agricultural Costs & Prices that went to 20 procurement centres in the two states.

Farmers in UP who opted for a hybrid variety were indeed lucky if their produce was even picked up by FCI or its agencies. While the government is eyeing hybrids to boost productivity, procurement centres side with local millers, who prefer non-hybrid varieties said to be less brittle.

A team from the Commission for Agricultural Costs & Prices surveyed 20 procurement centres in the two states last week and found distress sale in many. The team will take up the issue with PM Manmohan Singh.

"We are preparing a report. I plan to take up the issue with the PM since this is the second time we have noticed that there are problems with procurement," CACP chairman Ashok Gulati said. FCI chairman Siraj Hussain could not be reached for comment. A senior officer in the UP food department said he had not received a report from the Centre so far. "Quite often, we receive complaints and we have a toll-free number to help people. Whenever we hear of poor procurement or the centre being shut, we immediately take action," the officer said. Despite several attempts, Bihar food secretary Shishir Sinha could not be reached.

For long, Bihar and eastern UP have complained that FCI focuses its energies on Punjab, Haryana and western UP, while neglecting other parts of the Gangetic belt. This year, West Bengal and Orissa too have joined the chorus. FCI has repeatedly been blamed for its inability to create storage space, resulting in wastage of grains.

Times View: National Rural Employment Guarantee Scheme pledges to provide a minimum amount of work to the rural poor on a minimum daily wage. Its purpose is to give some income support to the poor. Similarly, minimum support price for crops is meant to ensure that farmers aren't forced into distress sales. The government is pledged to both - in the case of the NREGS, the pledge is legally binding. Yet, the promises are being violated. This, naturally, undermines the state's credibility. It also draws attention to a moth-eaten, leaky delivery mechanism. It must be fixed. Those being promised deserve better and so do the taxpayers who pay for the scheme.