CHANDIGARH, July 26 — The Food Corporation of India (FCI) is to wash its hands off paddy procurement in Punjab in the forthcoming kharif season.

In a letter to the Secretary, Food and Supplies, Mr P. Ram, the FCI Zonal Manager (North), Mr Alok Sinha, has said the state “alone should procure paddy under the minimum support price (MSP) scheme and that this task should not hereafter be shared with the FCI”.

Conveying the decision of the FCI “headquarters”, the letter further says that the “FCI should be entrusted with the procurement of rice only through the levy route”. In other words, the procurement of paddy will, henceforth, be the responsibility of the state and trade (millers) with the FCI left alone to concentrate on proper inflow-outflow management of the central pool.

The FCI suggests that the state may like to encourage the millers to procure more paddy so that MSP operations were to that extent reduced and the state procurement agencies did not have to procure too much paddy.

The FCI’s decision has created a flutter in the government. The Punjab Minister of Food and Supplies, Mr Madan Mohan Mittal, has shot off a letter to the Union Minister of Consumer Affairs and Public Distribution, Mr Shanta Kumar. Strongly protesting against the FCI communication, he has described it as an “ irresponsible act”.

Talking to TNS, Mr Mittal said it was a “serious issue. “I am the most worried person”.

New paddy arrivals will begin in another two months with official procurement slated to begin from October 1. Mr Mittal has requested Mr Shanta Kumar to pay a visit to Chandigarh to discuss the matter related to paddy procurement, storage, milling and evacuation from the state. Mr Shanta Kumar is likely to be here on July 31.

At present nearly 1 crore tonnes of wheat is stored in Punjab godowns. Finding more storage space for fresh paddy and rice is a worrisome issue.” Our prime concern is to safeguard the interest of farmers”.

Referring to past practice, Mr Mittal said in the 1980s the FCI procured 100 per cent paddy under MSP operations. The state and its agencies were not prepared to enter into paddy purchase. After repeated insistence by the FCI state agencies started to share paddy buying with the FCI, he added.

Over the years, however, the FCI started dragging its feet. Its share in procurement began to dwindle. Earlier it was a ratio of 65:35 under which the FCI and the state agencies procured paddy. The ratio was eventually reversed, with the state being burdened to buy 60 per cent and the FCI settling for only 40 per cent. “Last year, the FCI’s procurement was less than 30 per cent”.

This has put the state agencies to losses. Far from being “sympathetic” to the state and its procurement agencies, the FCI, instead, often took arbitrary decisions to the disadvantage of Punjab. “We are for 100 per cent procurement by the FCI”, said Mr Mittal.

Both the SAD and the BJP share power in New Delhi and Chandigarh. Will the issue be sorted out at the level of minister (Mr Mittal and Mr Shanta Kumar) or will it require the intervention of the Chief Minister, Mr Parkash Singh Badal, and the Prime Minister, Mr Atal Behari Vajpayee?

In the recent past Punjab has been asking the Centre to adopt policies conducive to the state’s interests. But time and again its suggestions have been turned down.

“Levy route procurement” has to be encouraged, but Punjab wants the allied matters to be settled first and soon. For instance, it wants the paddy milling season to be extended given the system constraints in the rice-milling operations. Second, despite repeated requests the Centre has not moved to ensure the speedy outflow of stocked wheat to make space for new paddy and rice. On the mills’ premises the state has given covered space for 22 lakh tonnes of rice. Still nearly 5.5 lakh tonnes of paddy remains to be milled. Punjab wants milling to be extended till August- end.

It is the statutory duty of the FCI to ensure the MSP. It gets subsidies from the Centre for its operations. But the FCI gives no credit facilities to the state procurement agencies. The state, for want of resources, goes to the Reserve Bank of India.

There is also the problem of stocks of rice, officially termed as “beyond rejection limit”. The FCI acts on its whims and fancies. It neither lifts the entire levy rice nor compensates the millers for having stored the same.