Teaching Cases

Food Corporation of India: Asian Journal of Management Cases

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Making Public Procurement © 2023 Lahore University of
Management Sciences
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Avinash Kumar1 , Kushankur Dey2 and Kriti Bardhan Gupta2

Abstract
This case concerns the issue of enhancing the inclusivity and efficiency of public procurement opera-
tions undertaken by the Food Corporation of India (FCI) in Uttar Pradesh. The FCI was the premier
central government agency entrusted with efficient management of minimum support price (MSP)-
based public procurement operations, maintenance of buffer stocks for ensuring food security and
assisting states in operating their public distribution systems.
  The Uttar Pradesh region came under the north zone of the FCI. Mr Girish Kumar, General Manager
of Uttar Pradesh region of the FCI, was exploring ways to make procurement operations inclusive and
efficient. Girish received feedback from a brainstorming session of the procurement team in which
recommendations of a recently conducted concurrent evaluation study of public procurement in
Uttar Pradesh were discussed. He wanted to amalgamate his domain knowledge with insights from the
concurrent evaluation study for an actionable plan to design a more inclusive and efficient MSP-based
public procurement system.

Keywords
Agribusiness, marketing, price support scheme, procurement, supply chain management

Discussion Questions
1. How does the Food Corporation of India (FCI) function with reference to paddy/rice procure-
ment in India? What are the challenges faced by public procurement agencies in India?
2. How do you understand the actor-function matrix of agri-commodity value chains? Can you
compare the paddy (cereals) and milk (dairy) value chains considering commodities characteris-
tics such as bulkiness and perishability, frequency of transaction/production, costs and complex-
ity of processing technologies?

1
Indian Institute of Management Calcutta, Kolkata, West Bengal, India.
2
Centre for Food and Agribusiness Management, Indian Institute of Management Lucknow, Uttar Pradesh, India.

Corresponding author:
Kushankur Dey, Centre for Food and Agribusiness Management, Indian Institute of Management Lucknow, Lucknow,
Uttar Pradesh 226013, India.
E-mail: kushankur.dey@iiml.ac.in
2 Asian Journal of Management Cases

3. How do you define procurement in supply chain management? How is MSP-based procurement
different from market-driven procurement? What is the difference between centralized and
decentralized procurement in MSP-based public procurement?
4. Evaluate public procurement operations of the FCI on socio-economic parameters.
5. What are your suggestions to Girish for devising a more inclusive and efficient procurement
system? How can ICTs contribute to it?

It was November 2019, and winter had announced its arrival in Lucknow, India’s capital of
Uttar Pradesh.1 Girish Kumar, General Manager of the Food Corporation of India (FCI), had barely
settled into his cabin when he received an email from the corporate office. The FCI was the apex central
government agency entrusted with managing public procurement of food grains, ensuring remunerative
prices for farmers, maintaining buffer stocks and assisting the public distribution of food grains. It also
undertook appropriate market interventions for attaining food grain price stability (Food Corporation of
India, n.d.). Refer to Exhibit 1 for the information on the FCI’s-pan India presence and organizational
structure. Girish pondered over the concluding line of the message, ‘You need to devise an action plan
for an inclusive and efficient Kharif (Srija, 2015) paddy/rice procurement in Uttar Pradesh for the Kharif
marketing season (KMS) of 2020–2021’. He called Prateek Singh, Manager, procurement, and asked
him to convene a meeting of the procurement team.
During the meeting, Prateek suggested,

The inclusive and efficient Minimum Support Price (MSP) based public procurement can further the mandate
of our organization. We need to work towards enhancing small and marginal farmers’2 coverage and find ways
to leverage Information and Communication Technology (ICTs) for designing an inclusive and real-time
procurement system. We should reduce turnaround time at procurement centres and shorten farmers’ waiting
periods for paying dues. We need to plan our storage capacities in sync with stock levels and to address griev-
ances of rice millers.

Furthermore, he brought the attention of the team to the recommendations of an evaluation study con-
ducted on paddy/rice procurement in Uttar Pradesh. He stated, ‘I believe the recent study undertaken in
the Kharif Marketing Season (KMS), 2019–2020, can provide some insights for strengthening procure-
ment operations’. The meeting ended with a decision to implement a plan for inclusive and efficient
public procurement. Inclusiveness in such a plan should lead to increased participation of small and
marginal farmers, while efficiency should result in the performance of various supply chain functions at
reasonable costs.

Minimum Support Price and the Food Corporation of India

The minimum support price (MSP) represented the minimum prices for various crops that the govern-
ment considered remunerative and worthy of support. The MSPs for 23 farm commodities announced by
the Government of India at the onset of annual cropping seasons ensured remunerative prices for farm-
ers, served as a floor price, prevented distress sales by farmers during bumper harvest years and thus
supported long-term planning by them (Vikaspedia, n.d.). The MSP-based procurement operations
occurred during the Kharif and Rabi marketing seasons, coinciding with the harvesting time of corre-
sponding agricultural seasons. Over the years, the MSP-based price support scheme had contributed
significantly to promoting agricultural growth, farmer welfare and food security.
Kumar et al. 3

Notwithstanding these positives of MSP-based price support scheme, it had also faced criticisms on
account of the exclusion of small and marginal farmers, the promotion of regional income disparity by
limiting procurement operations to certain geographical regions and the increased magnitude of mono-
cropping (rice and wheat cultivation) at the cost of pulses and oilseeds (Aditya et al., 2017). Less than a
quarter of farmers were aware of the MSPs,3 and only 6% of farmers benefited from public procurement
of food grains (ET Bureau, 2019). Due to their small marketable surplus, the immediate requirement of
cash, a lack of awareness and procedural and logistical challenges, small and marginal farmers failed to
participate in MSP-based public procurement effectively. Only a limited number of states, such as
Punjab, Haryana, Telangana, Madhya Pradesh and Chhattisgarh, majorly benefited from MSP-based
public procurement.
The FCI managed the procurement operations for rice and wheat—two major food grains.2 It played
a major role in achieving self-sufficiency in food grain production and ensuring national food security.
However, the FCI also attracted negative publicity on account of maintaining food grains beyond the
stipulated buffer norms, the questionable viability of undertaking open-ended MSP-based procurement
on economic and ecological grounds (The Indian Express, 2020), damages occurring during storage
(Anand, 2020), non-revision of central issue price (CIP) to states despite rising financial costs and so on.
Also, its long-term borrowing had increased due to the delayed reimbursement of the gap between eco-
nomic cost and issue price by the Government of India (Mishra, 2020). Most of these claims forming the
ground for criticism of the FCI were either beyond the purview of the FCI or unsubstantiated. In response
to these claims, the FCI undertook fact-based rebuttals of these criticisms from time to time (Food
Corporation of India, 2020). Despite such debates, the role played by the FCI in ensuring food security
during various natural calamities, including the COVID-19 crisis, reaffirmed its continued relevance
(Narayanan, 2020). To make the FCI suitable under dynamic and changing circumstances, the central
government constituted a High-Level Committee (HLC) in 2014.

High-level Committee Recommendations

The mandate of the HLC included reorienting the role of the FCI in procurement, storage and distribu-
tion of food grains under MSP-based public procurement operations. The committee recommended
adopting a decentralized procurement approach wherein the FCI could hand over procurement opera-
tions of food grains to states with adequate expertise in public procurement and reasonable supporting
infrastructure. Furthermore, it suggested that the FCI reorient the focus of its procurement operations on
states in the eastern part of India, which could fuel the second green revolution (Bhatt et al., 2016) in
India but lacked procurement infrastructure.
The committee recommended that the FCI outsource its stocking operations to various central and
state government agencies and the private sector. Also, it suggested gradual phasing out of the cover and
plinth (CAP) storage system, setting up silo storage structures and containerization of grain movements
to reduce damages in transit and achieve a faster turnaround. It also recommended revising the MSP
regime to achieve better coordination between the price support mechanisms and trade policies. It sup-
ported increased participation of the private sector in storage and recommended promoting negotiable
warehouse receipt-based financing (Kumar, 2015). The central government had expressed the desire to
work on some of the committee’s recommendations (ET Bureau, 2019). It also undertook some decisions
to promote direct marketing and contract farming to enhance choices for farmers by encouraging private
sector participation (Jebaraj, 2020).
4 Asian Journal of Management Cases

Uttar Pradesh
Uttar Pradesh, with a geographical area of 2.4 million sq. km (Department of Information and Public
Relations, n.d.), was the most populous state in India and was home to over 2 billion people (Office of the
Registrar General & Census Commissioner, n.d.). Garlanded by the Ganga and the Yamuna, two auspicious
rivers of Indian mythology, the state of Uttar Pradesh was divided into three agro-climatic zones (Department
of Agriculture & Cooperation, n.d.) and had plentiful natural resources supporting agriculture. Hence, agri-
culture played an instrumental role in the state economy by contributing more than a quarter of its gross
state domestic product (GSDP). Around 68% of its population was engaged in farming (Department of
Agriculture, 2020). Uttar Pradesh was the largest producer of cereals in India and contributed more than
20% of total cereal production. Popularly known as the granary or breadbasket of India, Uttar Pradesh has
made a significant contribution to the agriculture and food security of India.
However, due to the excessive fragmentation of land, the number of small and marginal farmers in
Uttar Pradesh had increased over the years. According to a recent agricultural census, small and marginal
farmers accounted for nearly 93% of total farmers and owned only 66% of the land (refer to Exhibit 2).
Poverty was widespread in Uttar Pradesh, with a higher magnitude of poverty ratio in its central and
eastern districts. Close to 30% of its population, about 60 million people, survived below the poverty
line, making it home to the largest number of poor in India (World Bank, 2016). Moreover, the unem-
ployment and malnutrition rates in Uttar Pradesh were also high.
Given a large population size, rich natural resource base, overdependence on agriculture and preva-
lence of poverty and malnutrition, agriculture became a mainstay for Uttar Pradesh. Considering the goal
of doubling farmers’ income by 2022 (Chand, 2017), agricultural growth in Uttar Pradesh had emerged
as a policy priority (Press Trust of India, 2018). Building a robust procurement system by ensuring farm-
ers’ awareness of and access to MSP could contribute to agricultural growth and farm sector buoyancy
in Uttar Pradesh.

FCI and Public Procurement in Uttar Pradesh

Headquartered in Lucknow, the Uttar Pradesh region came under the North Zone of the FCI. The 19
divisions under the Uttar Pradesh region of the FCI included Agra, Aligarh, Bareilly, Bulandshahr,
Hapur, Jhansi, Moradabad, Saharanpur, Shahjahanpur, Sitapur, Allahabad, Azamgarh, Banda, Faizabad,
Gonda, Gorakhpur, Kanpur, Lucknow and Varanasi.
During the KMS 2019–2020, Uttar Pradesh followed a centralized procurement model wherein the
various state agencies delivered the entire stock of food grains they procured to the FCI for storage and
subsequent issue and distribution. For details about agencies involved in paddy procurement during
KMS for 2019–2020 in Uttar Pradesh (refer to Exhibit 3). The FCI reimbursed the cost of food grains
procured by the designated state agencies as per the cost sheet issued by the central government. The
milling of paddy procured during the KMS, 2019–2020, was done by contracted rice millers under cus-
tom milling arrangements (such rice was called custom milled rice). Subsequently, the millers delivered
rice lots to the FCI storage points against the rice delivery certificate issued by the FCI. The FCI later
released these stocks against the central government’s allocations. Refer to Exhibit 4 for more informa-
tion about the MSP-based paddy/rice procurement value chain.
However, public procurement in Uttar Pradesh was beset with many challenges. Farmers usually
lacked information about MSP at the onset of the sowing season and were unable to make informed deci-
sions regarding crop choices. The lack of pre- and post-planning and gaps in the systematic administrative
Kumar et al. 5

mechanisms required to effectively implement MSP-based procurement resulted in unsatisfactory per-

formance. In general, triangular coordination among the farmers, nodal agencies of procurement, and the
state government was lacking (NITI Aayog, 2016; Verma et al., 2017). Logistical issues and infrastruc-
tural bottlenecks at procurement centres also discouraged farmers’ participation in MSP-based public
procurement. As per the Socioeconomic Caste Census (SECC) 2011–2012, Uttar Pradesh had 23.325
million farmers (Department of Rural Development, n.d.), and despite the participation of multiple agen-
cies in public procurement operations, only 7,08,485 farmers benefited from MSP-based procurement in
2019. The majority of small and marginal farmers failed to participate in the public procurement of food
grains. For information about public procurement in Uttar Pradesh over the years (refer to Exhibit 5).
In recent years, the Agricultural Produce Market Committee (APMCs; State Agricultural Produce
Markets Board Uttar Pradesh, n.d.), which essentially represented regulated market yards for trade in
agricultural commodities, had witnessed several initiatives for improving their functioning. In Uttar
Pradesh, 100 out of 400 APMCs were integrated with the electronic National Agriculture Market (SFAC,
n.d.-a; State Agricultural Produce Markets Board Uttar Pradesh, n.d.). eNAM was an electronic trading
portal for the national integration of various agricultural markets to improve price discovery through
real-time information dissemination of price and quantity to various agencies. It also enabled a single-
point levy on market fees and a unified licencing system for traders. However, most of the eNAM-inte-
grated APMCs in Uttar Pradesh were not functional, and the relatively poor performance of
eNAM-integrated APMCs in meeting their objectives of price discovery and dissemination to relevant
stakeholders further reduced the effectiveness of public procurement.

The Survey-based Findings

The procurement team of the FCI decided to discuss the various suggestions made in the concurrent
evaluation study of paddy/rice procurement in Uttar Pradesh during the KMS 2019–2020. Girish Kumar
instructed the team to suggest actionable inputs based on the survey. After perusing the survey-based
findings, the procurement team brought attention to the reasons for the exclusion of small and marginal
farmers, the lack of transparency in procurement operations, and problems with storage and milling
infrastructure.

Reasons for Exclusion of Small and Marginal Farmers

Landholdings and marketable surpluses of beneficiary farmers (who sold paddy at the MSP) were signifi-
cantly higher than those of non-beneficiary farmers, which implied the exclusion of small and marginal farm-
ers from MSP-based procurement operations. For information about the socioeconomic profile of beneficiary
and non-beneficiary households, refer to Exhibits 6A and 6B. Non-beneficiary farmers received lower aver-
age prices with high dispersion. For price realization through different selling mediums, refer to Exhibit 7.
However, turnaround time and time elapsed for cash realization were higher for beneficiary farmers (refer to
Exhibit 8). The main reasons for farmers selling their produce below MSP were their immediate requirement
for cash, quick and convenient payments in the open market, repayment towards credit taken from aggrega-
tors/agents/mills, refusal of grains at procurement centres, uncertainty about the dates of public procurement
operations and a lack of nearby purchase centres. Information and awareness gaps were also major reasons
preventing small and marginal farmers benefiting from MSP-based public procurement. The major sources
from which farmers received MSP-related information included local newspapers, SMS alerts and word-of-mouth
6 Asian Journal of Management Cases

from fellow farmers. Other information sources included commission agents, local market visits, television/
radio and local governing bodies such as gram panchayats (village councils). Notwithstanding multiple
sources of information about the MSP, low levels of awareness about MSP remained a formidable barrier to
enhancing the participation of farmers in the price support scheme.
The survey carried out in four districts of Uttar Pradesh in KMS 2019–2020 revealed that out of 140
non-beneficiary farmers, 75 (53.57%) reported that the MSP could prevent distress sales of paddy, 17
(12.14%) non-beneficiaries expressed that the MSP offered a remunerative price and 48 (34.29%)
respondents said that the MSP acted as a floor price covering paid-up costs of paddy cultivation. On the
other hand, 371 (80.13%) beneficiary respondents reported their intention to sell at the MSP to avert
distress sales and fetch a remunerative price. Moreover, 92 (19.87%) beneficiary respondents opined that
the MSP offered a floor price and covered their costs of paddy cultivation. 

Lack of Transparency in Procurement Operation

The transparency measures adopted at procurement centres included moisture metre analysis, online
procurement, onsite registration, recording and acknowledgment of paddy lots procured, SMS or
acknowledgment slips to farmers, online fund transfer, as well as grievance redressal helpline number
display. However, procurement centres/APMC market yards usually did not display the grade/quality
specifications and price information in the local language, resulting in a lack of transparency and infor-
mation gaps that reduced the bargaining power of farmers. The majority of farmers surveyed by the
study team complained about the inadequate display of price and quality specifications at the procure-
ment centres. Moreover, farmers rarely used the grievance redressal helpline number and approached
local mandi officials in case of any complaints. Farmers’ grievances were rarely addressed, pointing
towards non-functioning grievance redressal mechanisms.

Storage Infrastructure
Storage infrastructure was important for procurement operations as storage adequacy improved back-end
supply chains and facilitated optimal utilization of milling capacity for the conversion of paddy into rice.
The stock levels with the FCI varied across months, reaching their peak during May and June when wheat
procurement was in full swing, and rice procurement also continued. The stock levels dipped slightly dur-
ing the non-procurement months of September and October. The varying stock levels meant the FCI needed
to plan for variable storage capacity in sync with its stock situation. For this, appropriate choices of ware-
houses became essential. Several factors needed to be considered in deciding on warehouses. These factors
included the physical infrastructure and supporting equipment available at the warehouses, rental charges,
handling and transportation charges, reputation of warehouse owners and ease of supervision by the FCI
officials. The study reported variations in capacity utilization for hired and owned warehouses of the FCI.
Refer to Exhibit 9 for information about the capacity utilization of warehouses.

Milling Infrastructure
Milling involved the conversion of paddy into rice. Private rice mills generally performed milling on
behalf of the FCI. The efficient functioning of rice mills required optimal tagging, allocation of paddy
Kumar et al. 7

stocks and timely reimbursement of expenses incurred on paddy processing and transportation. The tag-
ging of mills for procurement as well as rice delivery centres was done online. The various expenses
incurred by these mills were reimbursed by the FCI post-delivery of rice to the FCI. The low-capacity
utilization levels for rice mills were a matter of concern. Refer to Exhibit 10 for information about the
capacity utilization of rice mills. The payments outstanding towards reimbursements to these mills also
necessitated appropriate action. Refer to Exhibit 11 for details about reimbursement dues to rice mills.

Recommendations
The study also made various suggestions for making public procurement inclusive and efficient. It sug-
gested leveraging farmer producer organizations, local government bodies and various other agencies,
such as Krishi Vigyan Kendras and Agricultural Technology Management Agency, for disseminating
MSP information and facilitating small and marginal farmers’ participation in MSP-based procurement.
It advocated pooling or aggregation of the marketable surplus of small and marginal farmers and provid-
ing logistical support to them. It also suggested plugging the infrastructural gaps in procurement through
conveniently located procurement centres, improving infrastructure at procurement centres and deploy-
ing trained workforce in procurement operations. Furthermore, it recommended proper implementation
of online web-based procurement for faster turnaround and a functional grievance redressal system for
improving small and marginal farmers’ participation. It also prescribed proper tagging of rice mills,
rationalizing paddy allocation, and an automated grain management system to optimize inventory hold-
ing and other supply chain costs. It recommended harnessing the potential of eNAM4 for understanding
the price trend of paddy in the open market vis-à-vis at APMC’s market yard for strengthening the
decision-making of procurement agencies regarding farmer management at the registered procurement
centres, paddy storage and release of paddy or allocation plan to rice millers. Finally, it advocated a
gradual transition of procurement operations from centralized to decentralized.

Green Shoots
After listening to the team’s informative presentation, Girish pondered the way forward. He complimented
the recommendations of the survey-based findings with his experience and domain knowledge. He was
considering the merits of public–private partnership (PPP) models in MSP-based food grain procurement.
Under the PPP model (National Commodities Management Services Limited, 2018), private warehousing
and logistics companies participated in distributing and stocking food grains for the price support scheme.
These agencies deployed manpower, notified purchase centres, constructed storage structures, and improved
payment mechanisms for farmers. The dual participation of public and private agencies through the PPP
facilitated extending the benefits of the price support scheme to regions left out of public procurement
operations. He was also considering the e-Uparjan 2.0 initiated in Madhya Pradesh (Mpeuparjan, n.d.). Its
ICT-based e-procurement platform offered farmers and state agencies a real-time and cost-effective mecha-
nism for efficient food grain procurement, transportation, storage and distribution. Refer to Exhibit 12 for
details about the e-Uparjan. Also, the example of the Small Farmers’ Agribusiness Consortium (SFAC)
promoted farmer producer companies in procuring pulses and oilseeds from their member farmers at MSP
in Gujarat, Rajasthan and Madhya Pradesh was also in his mind (SFAC, n.d.-b). There was little time, and
he had to design a more inclusive and efficient MSP-based procurement system.
8 Asian Journal of Management Cases

Acknowledgements
Authors gratefully acknowledge financial and technical assistance of Food Corporation of India, Uttar Pradesh
and the Ministry of Consumer Affairs, Food and Public Distribution, New Delhi for undertaking the study titled
‘concurrent evaluation of rice/paddy procurement in Kharif marketing season in Uttar Pradesh in 2019–2020’. The
usual disclaimer applies.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of
this article.

Funding
The authors received no financial support for the research, authorship and/or publication of this article.

ORCID iDs
Avinash Kumar https://orcid.org/0000-0002-5884-2484
Kushankur Dey https://orcid.org/0000-0001-6649-104X
Kriti Bardhan Gupta https://orcid.org/0000-0002-1443-6652

Exhibit 1. Details About the Food Corporation of India (FCI).

Zone Regional Offices Division Offices

North 8 54
East 4 36
West 4 20
South 5 36
Northeast 5 15
Source: FCI website (www.fci.gov.in).

Exhibit 2. Land Holding and Farmer Distribution in Uttar Pradesh.

Farmer Type 2010–2011 2010–2011 2015–2016 2015–2016

(Operational Holding (Area in (Number in (Area in (Number in
Area in Hectares) Percentage) Percentage) Percentage) Percentage)
Marginal (<1) 40.69 79.45 41.82 80.18
Small (1–2) 24.08 13.01 23.92 12.63
Semi-medium (2–4) 20.59 5.72 20.4 5.51
Medium (4–10) 12.48 1.71 11.89 1.58
Large (>10) 2.16 0.11 1.97 0.1
Source: Department of Agriculture, Co-operation & Farmers Welfare, Ministry of Agriculture & Farmers Welfare, Government
of India (2019).
Kumar et al. 9

Exhibit 3. Agencies Involved in Public Procurement of Paddy in KMS 2019–2020, Uttar Pradesh.

Actual
Target Procured
Number (Million (Million Metric Number of
Agencies of Centres Metric Tons) Tons) Beneficiaries
Department of Food & Civil Supplies, UP 683 1.80 1.928 253,701
Registered Cooperative Society 236 0 0.301 39,836
Multi-state Cooperative Society 172 0 0.146 18,687
Farmer Producer Organization 127 0 0.121 16,196
Provincial Cooperative Federation (UPPCF) 1,403 1.05 1.08 139,312
Provincial Cooperative Union (UPPCU) 440 0.65 0.677 77,654
National Consumers’ Cooperative 107 0.15 0.215 17,207
Federation (NCCF)
Karamchari (Employees) Kalyan Nigam (KKN) 158 0.40 0.261 32,951
National Agricultural Cooperative 109 0.10 0.21 21,248
Marketing Federation (NAFED)
UP State Agro Industrial Corporation 133 0.20 0.196 23,982
Limited (UPAGRO)
UP State Food and Essential Commodities 88 0.15 0.161 21,079
Corporation Limited (UPSFECC)
UPSS 218 0.30 0.264 32,172
Food Corporation of India (FCI) 103 0.20 0.095 14,460
Total 3,977 5.00 5.655 708,485
Source: Data extracted from Food & Civil Supplies Department, Government of Uttar Pradesh (2020).
10 Asian Journal of Management Cases

Exhibit 4.  Flow Chart of Paddy/Rice Value Chain (MSP-based).

Exhibit 5.  MSP-based Procurement in Uttar Pradesh.

Exhibit 6A. Socioeconomic Profile of Beneficiary Households.

Barabanki Chandauli Lakhimpur Kheri Pilibhit

(n = 74) (n = 78) (n = 74) (n = 78)
Socio-economic Indicators  Mean SD Mean SD Mean SD Mean SD
Age  50.4 10.9 54.2 11.0 47.4 11.3 48.5 11.8
Education level  Matriculate Matriculate Non-matriculate (>7th std) Non-matriculate (>7th std)
Male members  4.7 1.9 3.5 1.3 3.6 1.5 3.3 1.6
Female members  3.5 1.8 3.5 1.6 3.2 1.4 3.1 1.5
Operating paddy area (ha)  3.6 2.5 5.7 3.0 5.5 4.3 8.1 6.4
Owned  3.6 2.5 5.6 3.0 4.9 4.0 6.8 4.7
Leased  0.0 0.0 0.1 0.7 0.6 1.2 1.3 3.5
Paddy production (ton)  7.8 5.2 12.8 6.1 14.6 14.1 23.0 18.0
Cost of paddy cultivation (`/acre)  10,256.8 1,499.4 10,957.7 2,356.7 14,324.3 2,516.3 15,718.0 1,878.8
Paddy marketable surplus (ton)  7.2 5.3 10.4 5.8 13.3 13.8 22.6 18.1
Paddy sold at MSP (ton)  7.2 5.3 10.0 5.6 12.7 12.8 22.6 18.1
Sold in the open market (ton)  0.0 0.0 0.0 0.0 0.6 3.2 0.0 0.0
Open market price (`/ton)  na na  na  na  14,400.0 1,224.7 na na 
Source: Gupta and Dey (2020).
Exhibit 6B.  Socioeconomic Profile of Non-Beneficiary Households.

Barabanki Chandauli Lakhimpur Kheri  Pilibhit

(n = 76) (n = 72) (n = 76) (n = 74)
 
Socio-economic Indicators  Mean SD Mean SD Mean SD Mean SD
Age  48.1 12.6 53.3 10.5 47.1 12.2 47.1 10.7
Education level Non-matriculate (>7th std) Non-matriculate (>7th std) Non-matriculate (>7th std) Below 7th std
Male members  4.6 2.1 3.2 1.2 3.9 2.1 3.4 1.6
Female members  3.3 1.9 2.9 1.1 3.6 2.3 3.2 1.6
Operating paddy area (ha)  1.8 1.1 4.0 2.5 3.8 3.3 5.1 4.2
Owned  1.8 1.1 3.9 2.4 3.1 2.5 4.2 3.2
Leased  0.0 0.0 0.1 1.2 0.7 1.8 1.0 2.2
Paddy production (ton)  3.8 2.7 7.5 4.9 9.6 10.1 13.6 11.9
Cost of paddy cultivation (`/acre)  8,968.4 1,813.2 10,422.5 2,482.3 14,177.6 3,332.4 15,128.4 1,786.7
Paddy Marketable surplus (ton)  2.6 2.3 5.6 4.5 8.9 10.1 13.4 11.9
Paddy sold at MSP (ton)  0.0 0.0     0.0 0.0 0.0 0.0
Sold in the open market (ton)  2.6 2.3 5.6 4.4 8.9 10.1 13.4 11.9
Open mark price (`/ton)  15,100.0 803.2 13,092.4 14,21.5 14,377.1 1,012.3 14,406.8 591.8
Source: Gupta and Dey (2020).
Kumar et al. 13

Exhibit 7.  Price Realization Through Different Selling Mediums.

Selling Medium Respondents Mean SD

Arthias 62 14,775 737.2
Aggregators 19 13,726 1180
Private traders 75 13,166 1,344
Government procurement centre—Mandi 179 18,350 0
Private traders at Mandi 19 14,642 1,188
Government procurement by cooperatives/SHGs 124 18,350 0
Farmer producer organization 0 0 0
Retailers or rice mills 107 14,461 854
Consumers 3 14,583 381.9
Others 19 15,784 657.7
Source: Gupta and Dey (2020).

Exhibit 8.  Average Time Taken to Receive Full Payment After the Sale.

(N = 454) Respondents
Non-beneficiary On the spot 83
Within 48 hours 38
Within 3–4 days 16
Within a week 13
Total 150
Beneficiary Within 48 hours 3
Within 3–4 days 48
Within a week 105
A month or more 148
Total 304
Source: Gupta and Dey (2020).

Exhibit 9.  Storage Capacity (Hired and Owned), Covered and Covered, and Plinth (Cap).

No Mean (Ton) SD (Ton)

Hired Storage capacity (tons) 15 38,060.36 45,807.26
The covered stock of rice/paddy (tons) 15 28,566.71 19,858.78
CAP stock (tons) 0 0 0
Owned Storage capacity (tons) 4 39,802.60 35,747.44
The covered stock of rice/paddy (tons) 4 52,262.60 37,555.43
CAP stock (tons) 2 4,150.00 1,909.19
Source: Gupta and Dey (2020).
Notes: The capacity utilization of warehouses depended on stack area and operational area. The stack area represented the part of the
warehouse where paddy/rice bags were stored, and the operational area denoted space between stacks and between walls and stacks to
facilitate fumigation, sampling, loading, and unloading movements. For example, for a warehouse of 5,000 metric capacity, the floor area is
30,000 square feet. Of these, 72% was used as stack area and 28% as operational area. The capacity utilization of a warehouse depended
upon the height of stacking done for paddy/rice bags in the warehouse. While the stacking norm for paddy/rice bags was 14–15 feet, stacking
beyond this level was common in warehouses owned by the FCI compared to hired warehouses; the warehouses owned by the FCI were
more scientifically constructed and frequently supervised by FCI officials. Hence, stacking beyond stipulated norms was not an issue in
privately owned warehouses. The FCI hired additional storage space only after utilizing its warehouses to the highest permissible capacity.
  Moreover, due to less scientifically constructed hired warehouses, their rental charges in terms of cubic feet, and difficulties
in supervision by the FCI officials, stacking beyond stipulated norms was not practiced in hired warehouses. Covered and plinth
storage was also practiced in owned warehouses. Due to these reasons, the capacity utilization for the FCI-owned warehouses
exceeded 100%, while the hired warehouses had lower capacity utilization.
14 Asian Journal of Management Cases

Exhibit 10.  Milling Capacity and Capacity Utilization of Rice Mills.

Milling Capacity Quantity of Paddy Allocation

(Tons per Hour) (Tons per Year)
Districts Respondents Mean SD Mean SD
Barabanki 12 5.17 1.85 5,113.88 2,700.34
Chandauli 12 3.25 1.48 4,516.67 3,042.90
Lakhimpur Kheri 10 6.97 2.11 4,813.50 3,760.96
Pilibhit 12 5.08 1.49 5,602.50 3,421.92
All 46 5.04 2.12 5,020.25 3,147.54
Source: Gupta and Dey (2020).
Notes: Calculation for milling capacity utilization.
A rice mill operates 180 days a year and for 8 hours a day when it is functional.
Capacity utilization of rice mill = Paddy allocation (in tons per year)/[milling capacity (in tons/h) × 8 × 180].

Exhibit 11.  Outstanding Amount of Rice Millers During KMS 2018–2019.

Items Rice Millers Mean (` Million) SD (` Million)

Claims made 46 1.009 1.036
Payments received 46 0.734 0.860
Payments pending 46 0.275 0.408
Source: Gupta and Dey (2020).

Exhibit 12.  Linkages and Activities of e-Uparjan Actors, Madhya Pradesh.

Source: Mishra and Dey (2020).
Kumar et al. 15

Notes
1. The case authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The
authors may have disguised specific names and other identifying information to protect the confidentiality.
2. Farmers were classified into small and marginal farmers according to the size of their operational land holdings.
The operational land holding size for marginal farmers was less than 1 hectare, whereas the same for small farm-
ers was between 1 and 2 hectares.
3. Other agencies involved in MSP-based public procurement included the National Agricultural Cooperative
Marketing Federation of India (NAFED) and the Cotton Corporation of India (CCI).
4. eNAM is a pan-India electronic trading portal which networks the existing APMC mandis to create a uni-
fied national market for agricultural commodities. Small Farmers Agribusiness Consortium (SFAC) is the lead
agency for implementing eNAM under the aegis of Ministry of Agriculture and Farmers’ Welfare, Government
of India (see, https://www.enam.gov.in/web; Dey, 2016)

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