MP Cabinet Approves Mukhyamantri Krishak Uparjan Sahayta Yojna to Help Government Procurement Agencies

MP Mukhyamantri Krishak Uparjan Sahayta Yojna, a scheme aimed at providing budgetary allocation to enable government agencies such as the Food and Civil Supplies Corporation and  Markfed to tide over operational losses incurred during grain procurement from farmers, received approval from the Madhya Pradesh government in a Cabinet meeting on Tuesday. 

The announcement arrives at a time when the MP government has lost approximately Rs 6,000 crore in grain procurement operations, with another Rs 12,000 crore in unpaid accounts of grains bought by the Centre. 

The Department of Food Civil Supplies and Consumer Protection, as well as MP Markfed, acquires grain for the MP government. After the stock is lifted, it gets compensation from the Centre for grain procured. These agencies, in turn, borrow loans to pay farmers within 10 days while waiting for their outstanding debts with the government to be paid. 

"This policy was put in place to get entities like MP Markfed out of the vicious loop of paying high interest on loans taken to assure procurement and prompt payment to farmers," said state Agricultural Minister Kamal Patel. "If the current system continues without change, these departments, which are buried in debt, will be unable to conduct procurement." 

He further stated that the state government acquired over 1 lakh metric tons of several crops and pulses such as moong, against the Centre's specified procurement limit of 95,000 metric tons. 

Farmers will receive a fair market price as a result of the action. The state government, on the other hand, financed the additional procurement through loans. However, the state government is only reimbursed once the stock is removed from the godown. 

According to a senior state official, the operation and other procurement costs are totally paid by government agencies in situations when supplies are not taken, declined, or rejected. 

The MP government had a debt of Rs 2.5 lakh crore in loans till March 2021, which was more than its budget of Rs 2.41 lakh crore. The government now pays Rs 20,942 crore in interest each year.