Madhya Pradesh Government Unwilling to Procure Rice and Wheat at MSP

03-Nov-2025 03:03 PM

Bhopal: Citing the growing burden of debt, the Madhya Pradesh government has informed the Centre that it is not prepared to procure rice and wheat at the Minimum Support Price (MSP) from farmers during the 2025–26 season. In a letter sent to the central government, the state stated that the Madhya Pradesh State Civil Supplies Corporation is saddled with a massive debt of ₹77,000 crore, and therefore, the Centre itself should directly handle the procurement of these two key foodgrains.

If the Centre agrees to this proposal, the State Civil Supplies Corporation will no longer have any role in the procurement of paddy and wheat in Madhya Pradesh. It is worth noting that under the decentralized procurement system, the state government currently purchases foodgrains from farmers at MSP through its agencies, after which the Food Corporation of India (FCI) lifts the stocks. However, if the state withdraws from procurement this time, the FCI will have to step in directly and make purchases in the mandis.

Analysts believe this change will not affect farmers’ entitlement to MSP, as they will continue to receive the support price. However, the procurement process may face disruptions, since the FCI’s quality standards are considered relatively strict, increasing the risk of rejection of farmers’ produce. If government procurement slows down or faces obstacles, farmers may be forced to sell their produce to private traders at lower prices in the open market.

Due to delays in payment from the Centre, the state corporation’s bank borrowings have ballooned to ₹72,177 crore, leading to a significant interest burden. The Madhya Pradesh government has therefore urged the Centre to implement a centralized procurement system in the state and to ensure timely settlement of outstanding dues to ease the financial strain.