Food ministry seeks extra Rs 13,000 crore to help states pay farmers

NEW DELHI: The food ministry has sought an additional subsidy of Rs 13,000 crore to help states pay farmers for foodgrains procured by states for public distribution.

States purchase grain under the decentralised procurement scheme (DCP). Under the Food Security Act , the Centre procures grain either via state-run Food Corporation of India (FCI) or pays states for direct purchase, store and distribution.

“The Centre had allocated a subsidy of Rs 33,000 crore under DCP scheme to states for funding their procurement exercise in 2019-20. Many states like Andhra Pradesh, Kerala, Assam and Odisha have asked for additional funds to pay their farmers,” said a senior food ministry official, who did not wish to be identified.


He said that food secretary Ravi Kant has written to the finance secretary for this extra allocation to meet the procurement cost incurred by state governments.

“For the next fiscal, we have been allocated Rs 37,000 crore under DCP for states. If we get this Rs 13,000 crore, we will have sufficient funds to run the operations in the next year also,” said the official.

Under DCP scheme, the designated states procure, store and issue foodgrains under targeted public distribution system and other welfare schemes.