Govt asks states not to announce bonus on rice, wheat this year

To check inflation and encourage farmers to shift from mono-cropping, the centre has asked state governments not to announce bonus over and above the minimum support price (MSP) on rice and wheat this year.

It also warned that state-run Food Corporation of India (FCI) will restrict procurement of foodgrains from such states and will not give subsidy to states on procurement and distribution of surplus foodgrains.

The directive issued by the Union Food Ministry will be effective from the 2014-15 rice procurement season starting October and 2015-16 wheat procurement season beginning April.

According to the directive, ‘If decentralised procuring (DCP) states announce bonus over and above MSP of rice and wheat for this year, the Centre will give subsidy only on foodgrains procured as required for PDS and welfare schemes.’

FCI would not have to procure additional requirements in these states and it will be responsibility of these states to bear financial burden on surplus stock, it said.

A DCP state procures and distributes foodgrains itself and foodgrain subsidy is released by the Centre on a quarterly basis after distribution of grains by the state government. 

DCP is carried out in Chhattisgarh, Madhya Pradesh, Bihar, Gujarat, Kerala, Odisha, Tamil Nadu, West Bengal and parts of Andhra Pradesh and Rajasthan.