Divisions Policy & FCI

Issue of Levy Orders

Procurement of Levy Rice

DFPD during KMS 2014-15 implemented a uniform decision to reduce the levy rice percentage for whole country keeping it upto 25% of the paddy procured by the miller. Another system of rice procurement i.e. Customed Milled Rice (CMR) has proved better than levy system due to direct purchase from the Farmer subsequently direct benefit of Minimum Support Price (MSP) to the Farmers. Reduction in levy rice percentage gives better chances to the millers to get the benefit from the market and diminish chances of malpractices by millers involve in the levy system.

Reduction in Levy Percentage

Central Government had decided to restrict the delegation of powers to the State Governments made vide Gazette Notification NO. GSR 800 (E) dated 09.06.1978 under section 5 of Essential Commodities Act, 1955 (Act 10 of 1955) with regard to imposition of levy on rice from the millers/dealers through their levy orders in such a manner that no state could impose any such levy on rice exceeding 25% of the rice purchased or procured or held by millers with effect from 1st October, 2013. All the State Governments were directed to take necessary steps to comply with this order of Central Government.

Previously, the State Governments had provision to impose different rates of levy in accordance with their requirements and with prior approval of government of India. GOI used to decide the proposals of State Governments case to case basis for fixation of levy. By the time, as States have concerted procurement process and expanded direct procurement from farmers, they have reduced procurement of rice through levy system. However, implementation of levy order was differed by GOI due to practical difficulties food by State in its implementation. Keeping in view the fact that farmers are being benefited through direct procurement by State agencies and FCI and there are big possibility of malfunctioning by millers in the levy system and availability of huge stocks of rice in Central Pool, the levy percentage was restricted to 25% from 1st October, 2014.

Bringing down the levy percentage to Zero

Consequently, taking into consideration that the Customed Milled Rice (CMR) has proved better than levy system due to direct purchase from the Farmer subsequently ensuring thereby direct benefit of Minimum Support Price (MSP) to the Farmers and also that reduction in levy rice percentage gives better chances to the millers to get the benefit from the market and diminish chances of malpractices by millers involve in the levy system, Government of India has vide its order dated 20th February, 2015 brought down the limit of levy rice to 0% with effect from 1st October, 2015.

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