Procurement Policy
1. Existing Policy of Foodgrains Procurement
 The Central Government extends price support to paddy, coarse grains and wheat through the FCI and State Agencies. All the foodgrains conforming to the prescribed specifications offered for sale at specified centers are bought by the public procurement agencies at the Minimum Support Price (MSP). The producers have the option to sell their produce to FCI/State Agencies at MSP or in the open market as is advantageous to them. Foodgrains procured by the State Governments and their agencies are ultimately taken over by the FCI for distribution through out the country.
2. Objectives of foodgrains procurement by Government Agencies
- To ensure that farmers get remunerative prices for their produce and do not have to resort to distress sale.
- To service the TPDS and other welfare schemes of the Government so that subsidised foodgrains are supplied to the poor and needy.
- To build up buffer stocks of foodgrains to ensure foodgrain security.
3. Procurement of rice under levy system
Rice is also procured by the Government through statutory levy on rice millers and rice dealers. The percentage of levy rice is fixed by State Governments with the approval of Central Government taking into account requirements for the Central Pool, domestic consumption and marketable surplus. Prices of levy rice are fixed by the Government of India before commencement of every Kharif Marketing Season.
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