Financial Daily from THE HINDU group of publications
Wednesday, Sep 04, 2002
Agri-Biz & Commodities
Centre cracks whip on `paddy tender mafia'
NEW DELHI, Sept. 3
THE Centre has cracked the whip on the `paddy tender mafia' in Madhya Pradesh, Chattisgarh and Maharashtra, where stocks worth almost Rs 400 crore were slated for auction at rock bottom prices below Rs 380 per quintal.
The three State Governments had floated tenders for the disposal of paddy purchased under the Decentralised Procurement Scheme (DPS) during the 2001-02 marketing season (October-September). The quantities for which tenders were floated amounted to 4.82 lakh tonnes (lt) in Chattisgarh, 1.65 lt in MP and 0.85 lt in Maharashtra.
According to officials, in Chattisgarh, the State Civil Supplies Corporation had received quotes for 2.83 lt of the 4.82 lt for which tenders were floated. Out of this, the rates received for three-fourths of the quantities (2.10 lt) turned out to be below Rs 378 per quintal. This was as against the minimum support price of Rs 530 per quintal for common paddy announced by the Centre for the 2001-02 season.
Similarly, in MP, the rates received hovered in the Rs 378 per quintal range for around one lt out of the 1.65 lt of the tendered quantity. In respect of Maharashtra, the quotes varied from Rs 375 to Rs 460 per quintal.
Given such abysmally low rates, which were lower than the MSP as well as prevailing open market rates, the Union Minister of Consumer Affairs, Food and Public Distribution, Mr Sharad Yadav, has ordered that quotes below Rs 450 per quintal be rejected and only bids of Rs 450 per quintal and higher be accepted.
``Had the tenders below Rs 450 per quintal been accepted, it would have resulted in a loss of over Rs 15 crore to the exchequer, including Rs 11 crore in respect of Chattisgarh, Rs 3 crore in MP and Rs 1.25 crore in Maharashtra,'' the officials said. Further, they added that it was quite likely that the millers who had managed to obtain the paddy at rock bottom prices would have milled the same and supplied it back to the State agencies as levy rice at much prices in the coming 2002-03 season!
Under the DPS, the respective State Governments themselves procure foodgrains from farmers and distribute it within the State. The Centre foots the difference between the cost of acquisition and the price at which the grains are sold. Besides distributing the grains through fair price shops and for various welfare schemes, the State Governments are also allowed to auction the procured quantities to private millers/traders, subject to permission received from the Centre.
With the Centre rejecting the low prices received in the tender auctions, the State Governments will now have to get the paddy milled into raw rice and issue the same under the targeted public distribution system (TPDS) and other welfare schemes.
``On the one hand, each of these States are demanding huge quantities of rice and wheat from the Central pool for drought relief purposes. But on the other hand, these very States are seeking to dispose of grains at rock-bottom prices to millers and private traders. It is clear that there is strong tender mafia that is work,'' the officials pointed out.
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