CAG pulls up govt for fixing foodgrain MSP

NEW DELHI: The Comptroller and Auditor General ( CAG) has said the government fixed the minimum support price of food grain crops in a skewed manner and also faulted it for following inadequate norms on buffer food grains to meet contingencies during the audit period of 2006-07 and 2011-12.

In a report titled 'Storage Management and Movement of Food Grains in Food Corporation of India', tabled in Parliament on Tuesday, the CAG suggested that government increase procurement to meet the growing demand since it was lower than the allocation to Public Distribution System and other welfare schemes. However, it conceded that this might be difficult since only 45% of the total food grain production in the country made its way to the mandis.

Food Corporation of India is the government's nodal agency for procurement, storage and distribution of food grains in the country.

Alleging "skewdness" in the fixation of MSP based on the cost of production, the CAG said the margin of MSP over the cost of production varied widely and no norm had been prescribed for fixing the margin. The margin of MSP fixed over the cost of production varied between 29% and 66% in the case of wheat and between 14% and 60% in the case of paddy during the audit period, it added.

The government announces the MSP for about 20 farm items after taking into account the recommendations of the advisory body Commission for Agricultural Cost and Prices.

"Thus there is a need for greater transparency in the method of arriving at MSP over cost of production," it said.