Telangana chief minister Kalvakuntla Chandrashekar Rao on Monday launched a protest in the national capital against the central government, saying his party would start a farm agitation if the Centre didn’t decide on procuring the state’s paddy output within 24 hours.
What is at the heart of the dispute between the state and the Centre over the procurement of paddy?
The Union government, through the Food Corporation of India (FCI), its main grain handling agency, procures food grains at minimum support prices for distribution at subsidised prices through the public distribution system (PDS).
Telangana has alleged that the FCI -- in other words, the Centre -- has refused to procure parboiled rice, or rice that has been partially boiled before husking. Households in many states consume parboiled rice, while others don’t, depending on dietary preferences.
In terms of procurement, Telangana is a so-called decentralised procurement (DCP) state. Under this arrangement, the state procures and mills rice for the PDS on behalf of the Centre, based on its requirement. It keeps its required quantities for PDS distribution, and the balance is transferred to the FCI.
Under the decentralised model, agencies of the state government set up procurement centres. In states that have a robust network of mandis, or markets under agricultural produce market committees, such as Madhya Pradesh, farmers have easy access to procurement points.
{{/usCountry}}Under the decentralised model, agencies of the state government set up procurement centres. In states that have a robust network of mandis, or markets under agricultural produce market committees, such as Madhya Pradesh, farmers have easy access to procurement points.
{{/usCountry}}A dispute between the Telangana government and the Centre over procurement of paddy at minimum support prices has been brewing since last year, with Rao alleging that the central government was “discriminating” against the state by refusing to buy parboiled rice.
The FCI has an agreement with states on how the procurement takes places under the decentralised model. Since parboiled rice is not consumed in many states, the FCI has retained the option of specifying what kind of rice it will take from decentralised states.
Union food minister Piyush Goyal had told reporters on March 24 there was no question of any discrimination against any state.
Explaining the DCP model, Goyal, referring to Para 18 of an agreement with states, had said that if “stocks of the rice procured by the state government exceeds its allocation under TPDS (targeted PDS) and other welfare schemes, such excess stock shall be handed over to FCI by the state government”.
However, the FCI has the option to specify whether such access rice shall be in the form of raw or parboiled rice to meet the overall consumption requirement of the country.
Parboiled rice is not universally consumed across all states, according to an FCI official. This has led to FCI refusing to take over some of the balance parboiled rice offered by Telangana government, setting the stage for confrontation between the state and the Centre.