Changes in Government Procurement Pattern – UPSC GS3

Number of Beneficiaries:
  • It is often alleged that only a few (6%) farmers(large farmers) benefit from the MSP Scheme.
  • But actual figure is over 14% after launch of Decentralized Procurement (DCP) Scheme (1997-98).
Large Vs Small/marginal Farmers:
  • It is alleged that only large farmers benefit from MSP which is not true now.
  • At the all India level, among those who sold paddy to the government:
    • Large Farmers : 1% of total farmers
    • Medium Farmers : 41% to 61% of total farmers
    • Small and Marginal Farmers : 38% to 58%
  • In Chhattisgarh and Odisha, small and marginal farmers comprise 70­80% of all sellers to government agencies.
Traditional Vs Non-Traditional States:
  • It is alleged that most of the benefit is derived by Punjab, Haryana and West UP which is not true now.
  • 15 States had taken Decentralized Procurement (DCP) Scheme (1997-98).
  • Until 2000, barely 10% of wheat and rice was procured out­ side the traditional States. By 2012­-13, the share of the DCP States rose to 25­35%.
  • An over­whelming majority of agricultural households selling wheat to the procurement agencies come from Madhya Pradesh (33%) compared to Punjab (22%) and Haryana (18%).
APMC Vs outside buyers:
  • Proportion of sales via the mandi is only between 10-64% for MSP crops.
  • Even now farmers resort to sell produce outside mandis.
  • Demand for MSP originates because farmers get low prices outside.
  • Sales to mandi fetched, on average, just 13.3% higher prices for paddy and 5.8% for wheat.
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