• The government policy of procurement of food grains has broad objectives of ensuring the minimum support price (MSP) to the farmers and availability of food grains to the weaker sections at affordable prices. It also ensures effective market intervention, thereby keeping the prices under check and also adding to the overall food security of the country.

• The food corporation of India (FCI), the nodal central agency of the Government of India, along with others state agencies undertake procurement of wheat and paddy under the price support scheme. Coarse grains are procured by the state government agencies for central pool, as per the directions issued by the Government of India, from time to time. The procurement under price support is taken up mainly to ensure remunerative prices to the farmers for their produce, which works as an incentive for achieving better production.

• Before the harvest during each rabi / kharif crop season, the Government of India announces the minimum support prices (MSPs) for procurement on the basis of the recommendations of the Commission from Agricultural Costs and Prices (CACP), which along with other factors, takes into consideration the cost of various agricultural inputs and the reasonable margin for the farmers for their produce.

• Whatever stocks which are brought to the purchase centres, falling within the Government of India’s specifications, are purchased at the fixed support price. If the farmers get prices better than the support price from other buyers, such as traders / millers etc., the farmers are free to sell their produce to them. FCI and the state government/its agencies ensure that the farmers are not compelled to sell their produce below support price.