Home Agriculture Center Lauds Odisha Paddy Procurement

Center Lauds Odisha Paddy Procurement

Bhubaneswar: The Union Government has appreciated the efforts made by the Odisha Government for procurement of record amount of paddy during the Kharif Marketing Season (KMS) 2020-21.   

Union Secretary, Department of Food & Public Distribution Shudhanshu Pandey has lauded the State Government while addressing media persons yesterday.

Mr.Pandey said that this year Odisha, Punjab, Bihar, Gujarat, Telangana, Jharkhand, Kerala, Madhya Pradesh, Tamil Nadu, Uttarakhand & Uttar Pradesh surpassed their best ever procurement figure.

Despite delay in receipt of subsidy from Centre, delay in evacuation of surplus rice by FCI and short supply of gunny bags, the Odisha Government has procured a record amount of paddy during KMS 2020-21.

The State has procured 77.33 lakh MT of paddy during the KMS 2020-21 against the 70.56 lakh MT procured in 2019-20. In the KMS 2016-17, the State had procured 54.27 lakh MT, which was increased to 65.50 lakh MT in the 2018-19. It means the State has recorded a growth of 42.49 per cent in the paddy procurement process in the year 2020-21 compared to 2016-17.

Similarly, the number of farmers participating in the mega paddy procurement exercise has also increased by 64.7 per cent in 2020-21 against the KMS 2016-17. Only 8.47 lakh farmers have participated in the process in 2016-17, which was increased to 10.11 lakh in 2018-19, 11.61 lakh in the next year and 13.95 lakh in 2020-21.

Though paddy procurement has been increasing over the years, the lifting of rice by FCI from the State has not registered a commensurate and consistent increase. This problem has serious impacts like choking state godowns and preventing timely receipt of rice from millers apart from financial implications of thousands of crores of rupees for the State.

It is mandatory as per the agreed terms and conditions that the anticipated cost will be released in the form of advance subsidy at the rate of 90 per cent of admissible claim on quantity basis in the first month of every quarter.

However, the release of advance and provisional subsidy to Odisha is irregular despite the State furnishing Utilization Certificate (UC) in respect of the preceding period while submitting claim of advance subsidy at the start of every quarter.

As on date, Odisha State Civil Supplies Corporation (OSCSC), the major procuring agency of the State Government, is to receive Rs 5120 crore as provisional subsidy. Further, advance subsidy due to the State for the quarter ending June, 2021 is Rs 1500 Crore.

The delay in receipt and short receipt of subsidy and increasing volume of procurement that OSCSC is required to undertake, has two fold impacts on its financial health.

First, the additional interest incurred because of delay in release and non-release of subsidy remains un-recouped adding to its deficit year after year. Second, the surplus rice procured is being carried forward to next year incurring additional carrying cost.

There is no provision of recoupment of interest incurred for delayed release of subsidy and short release of quarterly claims remaining unpaid since FY 2003-04. Over the years, on the two counts, OSCSC has been burdened with huge additional interest of Rs 4700 Crore. 

The Paddy procurement operation under the MSP program is a task which is in the domain of Government of India. However, in order to extend the outreach of MSP to remote, far-flung and inaccessible areas, the Odisha Government took over it in the year 2003-04.

The paddy so procured is milled to rice through private millers and the rice so milled is distributed under National Food Security Act (NFSA), other welfare schemes of Government of India and State’s own State Food Security Scheme and the balance surplus rice is delivered to Central Pool through FCI.

Rice delivered to the Central pool is reimbursed by Centre through FCI and the cost of rice distributed under PDS in respect of national schemes in the State is subsidized by Centre. The State receives subsidy on account of rice so utilized in its PDS.

To maintain transparency, the State has adopted a web-based Paddy Procurement Automation System (P-PAS). Paddy is procured from registered farmers only after Aadhaar based biometric (iris) authentication. This ensures only genuine registered farmers enter the system. Besides, MSP amount is transferred directly to the accounts of farmers within 24 to 48 hours of purchases of paddy.