The document summarizes India's system for procuring grains from farmers. The central government announces minimum support prices and state agencies purchase grains meeting specifications from farmers. Farmers can sell to these agencies or privately. Decentralized states handle their own procurement while non-DCP states work through FCI. Over time, procurement of rice, wheat, and pulses has increased along with minimum support prices to support farmers.

1. Central Government extends price support to farmers for
purchase of paddy, wheat and coarse grains through FCI and
State Agencies.
Food grains conforming to the prescribed specifications are
bought by the Government procurement agencies at the
Minimum Support Price (MSP) plus incentive bonus announced,
if any.
Farmers have the option to sell their produce to FCI/State
Agencies at MSP or in the open market.
 Procurement at MSP is open ended.
System of Procurement

2.  In DCP (Decentralized procurement) States, the State Governments take entire
responsibility of procurement, storage and distribution for TPDS/OWS/NFSA.
 GOI reimburses expenditure incurred by the States.
 Foodgrains procured in excess of TDPS/OWS/NFSA requirements of States are
handed over to FCI.
 Government encourages DCP system to ensure better reach of MSP, making
available local varieties to PDS beneficiaries and cost-saving on transportation and
storage.
 In non-DCP States, State Agencies handover foodgrains to FCI for issue within the
State or movement to other States.
 Major responsibility of procurement of wheat and paddy is borne by State Govts.
And their agencies.
 Orissa, Chhattisgarh, Kerala, Tamil Nadu have increased their procurement of
paddy/rice, while Rajasthan in wheat and MP in both paddy/ rice and wheat
substantially increased their procurement in the last few years.
 Rice is accepted by FCI entirely in non DCP states and surplus in DCP states.
Procurement Policy

3. Production, Procurement of Rice & MSP of
Paddy
918
933 966 991
890
959 1053 1052 1065 1054
1034 1088.6
276
251 287.4 341 320.3 341.9
350.6
340.44
318.4
320.4
342.17
320.65
570 620 745
900 1000
1000 1080
1250 1310
1360
1410 1470
0
200
400
600
800
1000
1200
1400
1600
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17*
Year KMS- wise
Production
Procurement
MSP Common
*under progress(Data as on 22.03.2017)

4. Production, Procurement & MSP of Wheat
807 808
869
939 935 956 957.64 935.0
254 225
283
381
251 280.23 280.88 229.6
1080 1100
1170
1285
1350 1400 1450
1525
0
200
400
600
800
1000
1200
1400
1600
1800
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Quantity
in
LMT
Rs/Qtls
Year(RMS-Wise)
Production
Procurement
MSP

5. Procurement of Pulses
• To build up buffer of Pulses, DF&PD nominated FCI as
a nodal agency.
• Creation of buffer is to stabilize market procurement
of Pulses.
• 20 LMT buffer to be built up through domestic
procurement and import.
• 10.96 LMT Pulses procured by all agencies in KMS
2016-17
• FCI’s share in procurement is 2.28 LMT.