Professional Documents
Culture Documents
loses?
1. Introduction ……………………………………………………………………………………………………………… 2
6. Conclusion……………………………………………………………………………………………………….. 15
1. Introduction
Orissa is primarily an agrarian economy having nearly 30% contribution to the Net State
Domestic product (NSDP) with 73 percent of the work force engaged in this sector. Rice is the
staple food of Orissa. It is grown in almost all the parts of Orissa. Per hectare production of rice
today is 1.4 MTs as against 1.8 MTs for the country as a whole. Rice covers 77.7% of the total
gross crop area of Orissa. Along with production it is also equally important to maintain stock of
rice at state level. Government of Orissa maintains stock of rice by procuring it through various
agencies. Private players are also actively involved in this system are constantly supporting the
overall procurement system.
In this paper I would like to explain the present situation of paddy cultivation in Orissa and how
procurement of same d done at state level. I would also like to go in detail about the agencies
involved in procurement and price of procurement over the years. Since here we are talking
about procurement of Rice in the context of losers and winner I would write in brief about
different stakeholder involved in this process and their stakes in procurement of rice.
Broadly, organizations involved in this process are OSCSC, PACS, MARKFED, TDCC,
NAFED, FCI, NCMSL & Millers. So, it is very important to understand about these
organizations, their working pattern and procurement strategies in Orissa. Some of these
organizations are working on National level and few are only Orissa based. So, one can see the
difference between their strategies of rice procurement. Like, FCI gives high emphasis on quality
control of procured materials along with its purchasing & this is not the case with other
procurement agencies except NCMSL. At last an evaluation will be done of the loss and gain of
different players involved in this process.
Rice has been the principal food crop of Orissa much before the 14th century AD. When Wang-
Ta-Yuan, the Chinese writer of the 14th century visited the State it was being grown in
abundance. Other historical texts, like the Manasollasa of Somesvara and the Mahabharata of
Sarala Das, too point out that paddy cultivation was the mainstay of the people of this region
which was endowed with fertile land and had plenty of rivers running through it. Wild rice, it is
known, was tamed by the tribals inhabiting the Jeypore tract of Orissa which is considered to be
one of the secondary centers of origin of rice. The similarity between the name Orissa and the
Greek name for rice “Oryza” has led many to speculate that the name of the State derives its
name from the crop known as Oryza Sativa.
Thanks to the maritime skills of the Oriya’s, the locals traveled by indigenously built decorated
wooden ships called boita’s to far off Burma, Indonesia and Sri Lanka. It is during the course of
such business and plundering that popular variety of rice from those lands may have been
imported into the state to be later acclimatized and adapted as per local conditions. The important
varieties from the neighboring state of then undivided Bengal, home to rice eaters too may have
enriched the lands of the farmers of Orissa. Being in the possession of exquisite varieties was a
source of pride for the farmer as it elevated his position in the society. Farmers often exchanged
seeds just as coin collectors exchange rare coins. Besides these cultivated varieties, wild varieties
are found in the Jeypore tract, where the initial survey in the early decades of the 20th century
had recorded 150 varieties, and also the Bhitarkanika coastal area where a wild variety grows
abundantly in tidal mud flats based upon which many flood and salinity resistant varieties have
been developed.
It is thus no wonder that Orissa once had 50,000 recorded varieties of rice. The actual number
could have been more than 1,00,000 as record keeping was never the farmers forte. The Kings
too were fond of rice varieties as rice is an important part of the Mahaprasad that is offered to
Lord Jagannath every day. Even today there are huge stretches of land across Orissa that grow
rice for the daily offering to the deity.
Rice production in Orissa over the years. From 2000-01 to 2008-09 (in 000’MT)
Year Production
2000-01 4613.00
2001-02 7148.98
2002-03 3243.60
2003-04 6734.00
2004-05 6537.00
2005-06 6963.00
2006-07 6928.00
2007-08 7655.02
2008-09 7019.18
The FS & CW Department allocates the district-wise procurement target among government
agencies and under levy so as to achieve the overall procurement target based on the MSP,
expected monsoon, economic condition of the economy and facility available with the different
agencies The FS & CW Department fixes district wise target for raw and boiled rice for delivery
under CMR and levy to OSCSC and FCI, depending upon paddy production, rice milling
capacity and past performance; in consultation with State Rice Millers’ Association, Food
Corporation of India and Orissa State Civil Supplies Corporation, keeping in view the
requirement under PDS and the need for providing proportionately higher quantities of raw rice
to FCI for movement outside the state.
Rice procurement in Orissa is done by different agencies. Here is the list of Agencies which are
involved in procurement of rice in Orissa.
8. MILLER AGENT
Under decentralized procurement of rice the corporation for the first time undertook
decentralized procurement of paddy during the kharif marketing season 2003-04.
Effective price support operations for safeguarding the interests of the farmers.
Distribution of food grains throughout the country for Public Distribution System; and
Maintaining satisfactory level of operational and buffer stocks of food grains to ensure
National Food Security.
Since its inception in 1965, having handled various situations of plenty and scarcity, FCI has
successfully met the challenge of managing the complex task of providing food security for the
nation. A strong food security system which has helped to sustain the high growth rate and
maintain regular supply of wheat and rice right through the year. The efficiency with which FCI
tackled one of the worst droughts of the century not only cemented its role as the premier
organization in charge of food security in India, but also brought it accolades from international
organizations.
PROCUREMENT
(Fig. in MT)
KMS TOTAL
Levy CMR TOTAL Levy CMR
(levy+CMR)
2002-2003 9,49,700 0 9,49,700 9,02,999 0 9,02,999
2003-2004 14,00,000 1,00,000 15,00,000 13,09,142 89,311 13,98,453
2004-2005 17,00,000 3,00,000 20,00,000 13,13,942 1,75,863 14,89,805
2005-2006 14,00,000 8,00,000 22,00,000 9,65,614 7,97,017 17,62,631
Procurement Operations
FCI, Orissa Region was purchasing only levy rice since 1982-83 to meet the requirement of food
grains under various schemes of Government of Orissa as per directives of Hon’ble High Court,
Orissa, Cuttack and on the advice of State Government to avoid any possibility of distress sale of
paddy, FCI started intervening in the market by purchasing paddy directely from the farmers
since Kharif Marketing Season 2001-02. The present policy of the Central Government is for
Decentralized Procurement whereby the State should procure and utilize the rice in the Public
Distribution System. The State has participated in the procurement operation of direct purchase
of paddy through the Orissa State Civil Supplies Corporation and 4 (four) other state agencies.
But major target is put on FCI during the KMS 2006-07. The State Government, has fixed a
target of 22 lakh MT of rice out of that 4.67 lakh MT is fixed for Levy rice to be procured by
FCI from Rice Millers and 6,49,180 MTs CMR through direct purchase of paddy by FCI and its
agency NCMSL. The balance CMR has been given to the State Government Agencies for
procurement.
In the KMS 2006-07, the State Government through its agencies like Orissa State Civil Supplies
Corporation, MARKFED, NAFED, PACS and TDCC issue are engaged in direct purchase of
Quantity of
Custom Milling
Name of the No. of centres Revenue Districts paddy
Rice delivered
Agency opened covered purchased in
in MT
MT
PACS 819 28 117266 66956
NAFED 215 14 465608 278300
MARKFED 157 16 290850 190098
TDCC 9 8 20052 13027
OSCSC LTD 500 30 810622 * 505151
As stated above, FCI was involved in purchase of paddy in Orissa from KMS 2001-02 and it has
expanded its operations since then. In the district of Bolangir, there was a direction from Hon’ble
High Court of Orissa that FCI should open minimum 100 Paddy Purchase Centres. Since FCI is
having shortage of manpower, with the approval of Ministry of Consumer Affairs, Food &
Public Distribution, Govt. of India, PACS purchase and paddy in Bolangir district on behalf of
FCI. PACS opened 84 centres on behalf of FCI in Bolangir district in addition to 35 centres
opened and directly run by FCI for purchase of paddy directly from farmers. Details indicating
number of paddy purchase centres opened and revenue districts covered & paddy purchased in
KMS 2006 – 07 by FCI are indicated below :-
FCI district No. of centres opened Quantity purchased in MT Custom Milling Rice
Balasore 05 928 612
Berhampur 01 696 459
Jeypore 09 24203 15974
Sambalpur 32 61746 40752
Titilagarh 134 98458 64982
Total 181 186031 122779
The Ministry of Food vide its letter No.167(23)/2005-PY.I dated 24.11.2005 approved NCMSL
to purchase paddy on behalf of FCI with the approval of Govt. of Orissa. The Govt. of Orissa
approved NCMSL for purchase of paddy on behalf of FCI in Orissa as per its Food and
Procurement Policy. The following table will show the quantity purchased and number of
purchase centres operated by NCMSL during 2006 – 07 KMS.
No. of Centres Quantity purchased (in MT) as on 18.05.2007
447 7,50,897
Now the emphasis is more on direct purchase of paddy from farmers as it helps the farmers in
getting minimum support price through account.
The Food Corporation of India (FCI) procures cereals and foodgrains like wheat and paddy from
farmers at Minimum Support Price (MSP). FCI guarantees to buy all food grains from farmers at
the support price if it meets the quality specifications as laid by GoI under MSP. The FCI
procurement policies are intended as an insurance mechanism for farmers, providing price and
income stability.
There are seven FCI District Offices covering 30 Revenue districts of the state. FCI Orissa has
23(twenty three) own depots, 32(thirty two) hired depots from Orissa State Warehousing
Corporation, 8(eight) depots hired from Central Warehousing Corporation and Private Party. All
the depots are used for the purpose of scientific storage and procurement of foodgrains, 30
Revenue Districts are covered by 7(seven) FCI Districts which are as under:
QUALITY CONTROL
The FCI, Orissa Region has a high distinction of maintaining the quality standard of food grains
during procurement of levy rice, CMR and paddy, distribution of Rice/Wheat under TPDS and
other welfare schemes. In Orissa Region there has been no down gradation or damage to the
stock during preservation. Presently there is no stock of ‘D’ category rice, ‘C’ and ‘D’ category
wheat and 34.836 MTs slided down from ‘B’ Category to non-issuable at CWC, Junagarh. As
informed by Area Manager,FCI,Titilagarh responsibility were fixed on CWC & appropriate
value has been recovered from CWC. DCC/RCC/ZCC has been completed and recommended
for dumping.
NCMSL collaborates with FCI in the area of food grain procurement across different states as an
agency of FCI in align with the objective of creating linkages for growers & traders with the spot
and future market.
NCMSL specializes in full-control procurement operations and better farmer servicing.It started
our journey in the later part of 2005 and reached the inflection point in a remarkably short period
of time. Now it is poised for a nationwide procurement with high quality standard operations in
place.
Considering the above problems of the tribals, the Govt. of Orissa had formed a Welfare scheme
named Purchase Sale Fair Price Shop (PSFS ) Scheme under the control of T.R.W.
Department (now S.T. & S.C Development .Department). As the said scheme could not cover
the entire tribal Sub-plan areas and function under the administrative set-up in commercial line,
the Govt. of Orissa took a decision to form an Apex Cooperative Organization to take-up the
above activities for economic development of the tribals.
Paddy Procurement
Government:- Government is the largest buyer of rice. It purchases rice through different
agencies like OSCSC, PACS, MARKFED, TDCC, NAFED, FCI, and NCMS.
Government decides MSP (Minimum support price) so it has price control. MSP is
decided on the basis of cost of production and change in trend of market. Government
Millers :- Private millers procure paddy directly from farmers or farmer’s cooperatives.
Milling of rice is done and milled rice is then sold to different companies and even to few
government agencies. Since they are adding some value to the product there is a high
profit involved in this system. For millers major cost of procurement includes payment to
farmers, processing cost and registration fees.
Individual private players: - These are big business men who are in direct contact with
farmers or group of farmers. They buy paddy from farmers on farm or off farm and sell it
to milling industry or other processing plants. They are not regulated and thus they
sometimes create a major impediment in procurement system.
Farmer’s cooperative, Producer’s cooperative, SHG and other such groups:- These are
formal or non formal institution of farmers who produce paddy. They form their group
and do collective farming or collective marketing. They act as a medium between
industry and farmers. Their cost of production and marketing is reduced as they do a
large scale and thus they enjoy the benefit of large margin of profit.
Individual Farmers:- Farmers gets support price from government in the case when price
offered to them by market is not profitable. The Government has fixed the Minimum
Support Prices (MSPs) for Kharif Crops of 2010-11 seasons. The MSP of Paddy
(Common) has been fixed at Rs. 1000 per quintal and of Paddy (Grade A) at Rs. 1030 per
quintal, which represents an increase of Rs. 50 per quintal over the last year’s MSPs.
Farmers are free to sell their produce to anyone they want. The major costs incurred to
them are cost of cultivation & transportation cost.
7. Bibliography
1. www. fciorissa.nic.in
2. www.ncmsl.com
3. www.tdccorissa.org
4. www.oscsc.in
6. http://ouat.ac.in/Research/rice.htm
7. http://dacnet.nic.in/rice/HS-B-Table-13-Orissa.htm
8. www.living-farms.org/site/.../rice-in-orissa/119-rice-in-orissa
9. www.indiacom.com/yellow-pages/rice-mills/Orissa/
10. www.orissapds.in/File/Food%20Policy.pdf
11. www.naip.icar.org.in/ES/ESC2MSSRF.pdf
12. www.thefreelibrary.com/India+%3A+Rice+procurement+target+hiked-a0209203165