The Centre will procure 1.22 lakh tonnes of red chillies from Andhra Pradesh and Telangana markets under the Market Intervention Scheme (MIS) during 2017 season, Union minister M Venkaiah Naidu said.
This was decided during discussions held by Naidu with union agriculture minister Radha Mohan Singh.
Both the states witnessed a huge drop in the prices of chillies resulting in resentment from farmers, said a statement issued by the urban development minister.
“This MIS will remain in force from May 2 to May 31. A maximum quantity of 88,300 MTs of red chilli in Andhra Pradesh and 33,700 MTs in Telangana can be procured under the scheme by the state agencies,” it said.
The Market Intervention Price (MIP) will be Rs 5,000 per quintal of red chilli with the overhead expenses of Rs1,250 per quintal or actual, whichever is less. The overhead expenses include purchase tax, mandi tax, godown charges, packing material, loading/unloading, commission, transportation, grading, packaging /stitching charges, it added.
The losses, if any, will be shared on a 50:50 basis between the Centre and state governments. However, the loss is restricted up to 25% of the procurement cost (maximum limit of loss to be shared between Central and state governments), including the permissible over heads, it added.
Earlier, Union labour minister Bandaru Dattatreya leaders and public representatives from both the states met the Naidu for his intervention in the matter.