Bringing Green Revolution to Eastern States of India

1. Bringing Green Revolution to Eastern States of India Presentation by Dr. Amar Singh, CMD, FCI Kolkata, September 26, 2012

2. FCI’s Commitment • Incentivize production of food grains by ensuring Minimum Support Price (MSP) to farmers. • Assist the State Governments in procurement of food grains from the farmers. • Help create infrastructure like scientific warehouses, testing labs etc. • Equip the State agencies to take up procurement operations through capacity building measures.

3. Procurement Policy • Procurement of foodgrains is open ended to avoid any distress sale by the farmers. • MSP is revised by GoI on the basis of input cost incurred by the farmers. • MSP for Paddy has been revised from Rs 530 in the year2001-02 to Rs 1250 per quintel in KMS2012-13.

4. Procurement Policy (contd…. • Similarly MSP for wheat has been revised from Rs 580 in 2001-02 to Rs 1285 per qtl in RMS 2012-13 • To incentivize the state govt, GoI reimburses all the expenses incurred on the procurement of foodgrains for the central pool.

5. Minimum Support Price of Paddy & Wheat for Last 10 Years (Figures in Lakh MT) The MSP of paddy has increased by 2.3 times since 2001-02. The MSP of Wheat has increased by 2.2 times since 2001-02 *-MSP + Bonus (if any) for ‘Common’ variety of paddy

6. Production & Procurement of Riceat the national Level * For 2011-12, figures upto 24.09.2012

7. Eastern States Scenario for RICEDuring KMS 2011-12. In Lakh MTs There is tremendous potential to improve procurement in the states of West Bengal, Jharkhand and Assam.

8. Some Eastern States have shown substantial increase in Rice Procurement in last 6 Years (Figures in Lakh MTs) There is huge untapped potential in all the states, especially Assam , Jharkhand and West Bengal.

9. Production & Procurement of Wheat at the National Level The procurement as % of production has increased from 26% in 2002-03 to approx 42% in 2012-13.

10. Eastern States Scenario – WHEATDuring RMS 2012-13 Figs in Lakh MTs There is scope for increasing wheat procurement in UP and Bihar.

11. Procurement in major wheat producing Eastern States has increased substantially in last 6 Years. (Figures in Lakh MTs) * U.P. was in transition phase in RMS 2010-11 from DCP to Non-DCP mode. Since RMS 2007-08, the procurement in Bihar & U.P. has shown substantial growth.

12. System of Procurement - Wheat Wheat brought to Mandis By Farmers Unloading & Cleaning Inspection, Bidding & Purchasing Bagging, Weighment & Stitching Loading & Transportation (From Mandis to Godowns) Unloading & Stacking

13. System of Procurement – Paddy/Rice Paddy brought to Mandis By Farmers Unloading & Cleaning Inspection, Bidding & Purchasing Bagging, Weighment & Stitching Loading & Transportation Paddy Purchased by Millers (LevyRice) Paddy Purchased by Govt. Agencies (Custom Milled Rice) Paddy unloaded at Mill Point Paddy unloaded at FCI/St. Govt. Godown/Rice Mills Paddy Issued to Rice Miller against advance rice Loading & Transportation to Mill Point Paddy Milling Rice Delivered at procurement centres/Depots

14. What is needed for Procurement? • Organized Purchase centres (Mandis) • A dedicated state agency to co-ordinate procurement. • Adequate Financial resources. • Availability of adequate milling capacity for Rice • Adequate storage capacity for both Paddy/Rice and wheat. • Necessary logistic arrangements like road infrastructure, trucks, rail linkages etc.

15. Credit Limits taken by State Governments / Agencies for Procurement during 2011-12 All state Governments can obtain cash credits from RBI for doing the Decentralized Procurement Operation . Financial resources will not be a constraint in procurement of food grains.

16. Position of Milling Capacity in Eastern States There is tremendous scope of expansion of rice milling industry in the states of WB, Jharkhand and Assam.

17. Storage Capacity with FCI and State Govt./Agencies in Eastern States (As on 01.09.2012) (Figures in Lakh MT) The storage capacity available with State Agencies in Eastern states is only 23 % of the total as against all India position of 48 %. There is a need to increase the scientific storage capacity by the state govt. agencies of Jharkhand and West Bengal.

18. Additional Storage Capacity being created in Eastern States under PEG Scheme *Under 2012-17 Plan Since Govt. of India is creating huge capacity in these states, the respective State Govts. may also create additional Capacities.

19. KEY ISSUES of Eastern States from Procurement perspective • Lack of adequate number of organized purchase centres. It is a problem in all States except Chattisgarh. • Inadequate milling capacity. This is a major limiting factor in Assam Jharkhand and West Bengal and to a lesser extend in Bihar & Odisha. • Geographical imbalances in milling capacity. This issue is critical in West Bengal and Assam. • Imbalances in the geographical distribution of storage capacities. Bihar and Eastern UP faces this problem. We are trying to address this issue under PEG scheme.

20. Special efforts made by FCI for Eastern States • The criteria for deciding storage capacity requirements under PEG scheme was expanded to meet future potential. • FCI has already started movement of food grains by road to supplement railway infrastructure to ensure speedy evacuation. • In DCP States, FCI is accepting stocks from the inception of the season without waiting for the State to complete procurement of its quota.

21. Suggestions for future • The full potential of Eastern states can be tapped only with active participation of state Govts. • Assam, Bihar and Jharkhand may become DCP States, so that they become self reliant for PDS and have direct connection with the farmers. • Infrastructure building initiatives in terms of additional milling and storage capacity are required to create a conducive environment for procurement of food grains. • Apart from the storage capacity being created under PEG by FCI/GoI, State Governments should also endeavor to create additional storage capacity especially for intermediate storage. • State Agencies may build internal competencies for handling procurement. FCI can impart basic training to staff. • Multiple agencies/Cooperative Societies are required to be involved to enlarge the scope of procurement.

22. THANKS