Writeup AP 2011-12 - Punjab State Planning Board

districts of the state are covered under National Food Security Mission for wheat and no
district of the state has been included under National Food Security Mission for rice even
though state is its leading producer. Cotton is the major cash crop of the state occupying
about 5.50 lakh hectares area of the state. Approximately 17.05 lakh bales of cotton have
been produced in the year 2010-11.
19. State procuring agencies have to recover more than Rs. 7,461 crore from the
Govt. of India/ Food Corporation of India due to non finalization of procurement incidentals
and various pending claims. The Agencies are paying an interest to the tune of Rs. 75 crore
every month to the banks against the cash credit limit. Out of these recoverable amounts
about Rs. 3,400 crore is due because of non finalization of procurement incidentals from
Kharif Marketing Season (KMS) 2003-04 to 2008-09 and Rabi Marketing Season (RMS)
2004-05 to 2008-09. There is one more issue pending with Food Corporation of India (FCI).
The State Government vide its notification dated 24/9/2008 increased the infrastructure
development cess from 2% to 3%. The FCI is paying the infrastructure development cess @
3% on the direct purchase of food grains whereas for the food grains purchased by the state
agencies and sold to FCI, it is reimbursing the cess @ only 2%. The plea taken by the
Corporation is that they have filed a case in the Hon’ble Supreme Court, however, the
Hon’ble Court has not stayed the notification issued by the state government. The total
amount pending on this account is to the extent of Rs. 417.72 crore.
20. The increased food production and slow movement of food grains have
compounded the problem of food storage in the State. The state needs at least 78 lakh MT of
long term storage capacity out of which 25 lakh MT should be in the form of silos which can
store food grains up to three years. The state government has been consistently demanding
Government of India for assistance in creation of the long term, modern and scientific
storage capacity.
21. Three major issues that require immediate attention are food and nutrition
security, poor economy of small and marginal farmers and heavy indebtedness which is a
result of falling real farm incomes. The Commission for Agriculture Cost and Prices
(CACP) needs to re-examine the existing methodology of fixation of MSP. The MSP should
account for the cost of production and should be linked to the consumer price index. The
other alternative is to accept and implement the recommendations of the National
Commission on Farmers headed by the noted farm economist, Dr. MS Swaminathan, that
MSP should be equal to the cost of production plus 50% as profit. The farm labour should be
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