The Ministry of Food and Public Distribution and Consumer Affairs has sent a draft to the states in this regard. Under this proposal, the state government’s and their agencies will cover operations of procurement and storage of foodgrains for the central pool and their handing over to the Food Corporation of India. According to the draft, the state governments and their agencies will work for and on behalf of the Government of India to procure foodgrains and make arrangements for their safe storage under scientific conditions until the stocks are delivered to the FCI. The FCI will devise a mechanism to inspect the foodgrains procured and stored with the state agencies to check that the stocks conform to prescribed specifications. The state government and agencies will not be entitled to any reimbursement of losses incurred for stocks procured below the prescribed specifications.

According to the draft, the ownership of the stocks will lie with state government and the agencies till the same are handed over to the FCI.

Contrary to the belief that the Union Government wants to get rid of the MSP (minimum support price), the draft maintains that the state government and agencies will not procure any foodgrains at prices higher or lower than the MSP declared by the government. The state agencies will be responsible for proper and scientific storage of wheat procured by them so as to ensure that the quality of stocks is maintained at the permissible standards under the TPDS (targetted public distribution system) or any other scheme until the same are delivered to the FCI. Under the MoU, the state agencies shall make their own financial arrangements to meet the procurement costs of foodgrains and the local taxes.

At present the state government gets cash credit limit (CCL) from the Reserve Bank of India for procurement of wheat and paddy every year.

For settlement of disputes between the FCI and the agencies, the Union Government will set up a committee.

Dr B.C. Gupta, Principal Secretary, Food and Civil Supplies, Punjab, when contacted said they had sought comments from the state agencies on the issue of signing of the MoU.