Mechanism for Procurement

Procurement of foodgrains is done through Centralized Procurement System and Decentralized Procurement System.

Centralized Procurement System

Under Centralized Procurement System, the procurement of foodgrains in Central Pool are undertaken either by FCI directly or State Government agencies procures the foodgrains and handover the stocks to FCI for storage and subsequent issue against GOI allocations in the same State or movement of surplus stocks to other States. The cost of the foodgrains procured by State agencies is reimbursed by FCI as soon as the stocks are delivered to FCI as per cost-sheets issued by GOI.

Decentralized Procurement System (DCP)

The scheme of Decentralized Procurement of foodgrains was introduced by the Government in 1997-98 with a view to enhancing the efficiency of procurement and PDS and encouraging local procurement to the maximum extent thereby extending the benefits of MSP to local farmers as well as to save on transit costs. This also enables procurement of foodgrains more suited to the local taste.Under this scheme, the State Government itself undertakes direct purchase of paddy/rice and wheat and also stores and distributes these foodgrains under NFSA and other welfare schemes. The Central Government undertakes to meet the entire expenditure incurred by the State Governments on the procurement operations as per the approved costing. The Central Government also monitors the quality of foodgrains procured under the scheme and reviews the arrangements made to ensure that the procurement operations are carried smoothly.

The list of DCP states who have signed the MOU with Government of India for PROCUREMENT for Wheat & RICE

S.N.	DCP State for Rice	S. No.	DCP State for Wheat
1	Uttrakhand	1.	Madhya Pradesh
2	Chhattisgarh	2.	Uttrakhand
3	Odisha	3.	Chhattisgarh
4	Tamil Nadu	4.	Gujarat
5	West Bengal	5.	West Bengal
6	Kerala	6.	Bihar
7	Karnataka	7.	Punjab
8	Madhya Pradesh	8.	Maharashtra
9	Andhra Pradesh	9.**	Rajasthan (for 9 districts)
10	Bihar
11.	Telangana
12.	Maharashtra
13.	Gujarat
14.	Andaman Nicobar
15.	Tripura
16.*	Jharkhand (only for 6 District)*.

* Jharkhand was DCP for KMS 2016-17 (only for 1 district) 2017-18 (only for 5 District), 2018-19 (only for 6 District). They have adopted Non-DCP in KMS 2019-20.

** Rajasthan was DCP for wheat in RMS 2013-14 to 2015-16 (for 1 district) and 2016-17 (for 9 districts). However, in the interest of farmers FCI procures wheat from RMS 2017-18 onwards under Non-DCP mode.