Centre saves `12,500 cr as farmers sell in open market
Market prices of several commodities hovering over minimum support prices (MSP)
image for illustrative purpose
New Delhi: The center government saved Rs12,500 crore of food subsidy in 2022-23 financial year, not because of some innovative practices it introduced, but because the market prices of several commodities were more than the minimum support prices (MSP) it was offering for them. As a consequence, farmers decided to sell their produce in the open market instead of opting for government procurement.
The Department of Food & Public Distribution, under the Ministry of Consumer Affairs, Food & Public Distribution, has surrendered Rs12,500 crore of food subsidy from the financial allocation of 2022-23 fiscal, official sources told Bizz Buzz. Some time ago, the Union Finance Ministry revised downwards the financial support the Department of Food & Public Distribution’s foodgrain procurement from Rs72,282.5 crore in Budget 2022-23 to Rs60,561 crore. This was because of the lower procurement of wheat and two other cereals.
Wheat commanded higher prices in the open market, above the MSP throughout the year as the global supply chain was stressed because of the Russia-Ukraine War. The government banned wheat export, hoping that the prices would cool down, but that did not happen.The government found that aata or wheat flour was being exported after the ban on wheat export. Then it banned aata export also.
The government could not fully utilize the food subsidy because the procurement of wheat and cereals was less than its estimate, the sources said. The Ministry of Agriculture in the last three financial years had surrendered Rs44,000 crore.
It may be mentioned here that the Department of Food & Public Distribution had fully utilized the food subsidy last year. Expecting foodgrain prices to stay firm, the government has slashed the food subsidy for 2023-24; it has come down by Rs89,844 crore to Rs197,350 crore.
The government also merged the Pradhan Mantri Garib Kalyan Yojna with the National Food Security Scheme in December 2022.
India runs the world’s largest food programme through its public distribution system with Food Corporation of India being the sole agency for procurement of grains.
