DCP system faces challenges over late payments, MSP bonuses, surplus stock

The latest large grain producing state to choose centralised grain procurement has claimed high-interest loans and non-repayment from the Centre as a reason

Early in November, Madhya Pradesh Chief Minister Mohan Yadav wrote to the Union government with an unusual request: the state wanted to opt out of the decentralised procurement (DCP) system for foodgrains on account of mounting financial challenges.

 

In his letter, the chief minister claimed the state government had been suffering significant financial losses due to delay in clearing the foodgrain stocks it had purchased for distribution through ration shops for free under the DCP system.

 

As it turned out, the state government had borrowed heavily from banks to make payments to farmers, an amount that stood at Rs 72,177