The Centre is planning to put a cap on total charges fixed by States over an above the minimum support price (MSP), which may bring down its expenditure on procurement incidentals by ₹4,000 crore, after coming up with a fixed charge as arhtiya commission from earlier flexible rates (in per cent),

The Centre is estimated to have spent about ₹14,000 crore on procuring 102.61 million tonnes (mt) of rice and wheat during 2021-22 only to pay arhtiya commission, market fees and other levies, fixed by the States. Local levies paid by the Centre made up 4.33 per cent of the economic cost of rice, estimated at ₹35.97/kg in 2021-22. Similarly, they comprised 4.41 per cent share in wheat cost of ₹24.99/kg.

Involving private sector

Addressing the annual general meeting of the Delhi-based Roller Flour Millers Federation of India, Food Secretary Sudhanshu Pandey on Monday said the Centre had passed on two clear messages to the States regarding the procurement of foodgrains. One, it would provide up to 2 per cent incidental expenses (all inclusive) on the procurement undertaken by them. Secondly, private sector would be roped in to buy foodgrains for the Central Pool.

“It is at a concept stage and its implementation will depend to a large extent on the production of crops. Due to shrivelled wheat in 2022, the procurement fell drastically to 19 mt from 43.34 mt year-ago. At this juncture, it will not be affordable to take a chance with paddy procurement as States have also greater responsibility to ensure the target of purchase is achieved,” an expert said.

Punjab, for instance, imposed taxes to the tune of 6 per cent taxes — 3 per cent each as market fee and rural development cess in addition to ₹46/quintal as arhtiya commission (charges of commission agents). It is the highest by any State. But it contributed to over 50 per cent of wheat procurement this year when all other States failed to buy a reasonable quantity. Its share in wheat procurement was 30.5 per cent in 2021.