Paddy Procurement in Orissa

S.K.Panda , S.K.Bhol , M.K.Das

ABSTRACT

The Department of Food Supply and Consumer Welfare (FS&CW) and Orissa State Civil
Supplies Corporation Ltd who primarily responsible for the Procurement of Paddy in the state of
Orissa decided to go for a Paddy Procurement Computerization in Orissa. The same may be
used by other Agencies such as NAFED , MARKFED, TDCCC & FCI which will give a clear
picture of the Paddy Procured in Orissa. This system captures the details of the farmer who
comes to sell the paddy at the Paddy Purchase Centre , Receives the Receipt of the same after
weighment and quality check then the amount is paid to the farmer through the cheque. This
application is then capture the details of the miller who lifts the paddy and mills it delivers the
rice at the Rice Receiving centre. According the same Miller raises the bill which is settled
through this application. Once the stock of the Rice is known the Delivery module is used for the
Issue of the Rice to the Retailer.

Introduction : Orissa is the land where most of the Farmers are dependent on paddy . Paddy is cultivated
mainly in two seasosns of Khariff and Rabi. The surplus paddy cultivated by farmers are sold at a cheaper
rate to the millers though the Government takes lot of steps to avoid distress sale of paddy. In Order to stop
the distress sale of paddy the rate per quintal is fixed and communicated to all. The paddy purchased is
milled and again distributed under the Rs 2 per Kg scheme to the BPL Beneficiaries . The scheme covers
37.58 lakh non AAY- BPL familiesand 5.56 lakh non BPL families in KBK District Prior to
August 2008,BPL rice was provided at a rate of Rs 6.30/Kg & Rs4.75/ Kg respectively.

In Order to bring the transparency in the existing system , Paddy Procurement System in Orissa was
initialized by the former Secretary (FS&CW) Shri Manoj Ahuja , IAS and Conceptualized by Managing
Director, OSCSC Ltd Shri S.K.Vasishsth , IAS. The thought process was to know the everyday’s status of
the paddy procured by different agencies . The same is then delivered to the miller who receives the same
by Paddy Acceptance Note . The Mills are checked by the Enforcement officer and they issue Delivery
Certificate (DC) and Enforcement Certificate who mills it and then delivers at RRC / FSD as per the
instruction. The RRC Receives the Rice and issue Rice Acceptance Note to the Miller. This process
keeps on going till all the Rice is delivered by the Miller to the RRC /FSD. Once the process is over the
miller submits his Bill for the Payment to the OSCSC Ltd at District Level. He produces all the Rice
Acceptance Note during this which is verified and payment is made. The Rice Received at RRC is known to
the District Office and they issue the Delivery Order for Delivery of the PDS commodities to the Retailer for
distribution of the same to the Beneficiaries under different Schemes.It required a great deal of co-
ordination and management of the data in order to complete this decentralization process of paddy
procurement in Orissa..

NATIONAL INFORMATICS CENTRE(NIC) : A premier science and technology organization (http://www.nic.in) under the
department of Information Technology, Government of India, actively pursuing Information and Communication Technology
(ICT) applications in the government sector. NIC is providing network backbone and e-Governance support to central
government, state governments, UT administrations, districts and other government bodies. It offers a wide range of ICT
services including nationwide communication network for decentralized planning, improvement in government services and
wider transparency of national and local governments. NICNET facility has been established in all central government
departments, 35 states/UTs and over 612 District centers to facilitate informatics development for decision support and
information exchange. NICNET has 490 Video Conferencing sites connected through high speed VSATs.

Existing Method :In Orissa, Kharif Marketing Season starts from 1 st October and closes on 30th
September. For every season, Govt. of Orissa prepares the Food & Procurement Policy before the start of
the marketing session. The food and procurement policy is being implemented by Food, Supplies and
Consumer Welfare Department. According to the procurement policy, different agencies are being
appointed by the department. At present, the different agencies of Orissa are OSCSC Ltd., NAFED, PACS,
FCI, TDCC and MARKFED. The department set the paddy procurement target for the agencies district wise
by analyzing the previous years’ paddy procurement volume and current year’s paddy production. The
agencies appoint custom millers to mill rice from procured paddy through their custom millers on signing an
agreement.Millers are engaged by agencies on entering into agreement as per the decision of the collector.

District level Paddy Procurement Committee is formed under the chairmanship of Collector. This
Committee decides to open the Paddy Purchase Centres (PPC) in the district at different locations which
are convenient for the farmers to come and sell their paddy This committee also decides, as to the
schedule of the PPC, allocation of PPC to agencies. RMC yards are generally used as PPCs, if RMC is not
available then PPC is opened with temporary arrangements. Each PPC is tagged with the Millers.

The staffing pattern of a PPC is a Purchase Officer (Marketing Inspector or Supply Inspector or Asst Civil
Supply Officer), Accounts staff , Sell Asst.-cum-Godown Asst, Kantawala ,RMC staff (not in all the places)

Due to the shortage in working hands, one staff is looking after operation of more than one PPC. Paddy is
procured from the farmers at the Paddy Purchase Centres by the agencies in the presence of Millers’
representatives. The details of the farmers are entered in the Purchase Register. Paddy sampling is done
at the PPC before acceptance. If the paddy is as per the specification, then it is accepted. Once, the paddy
is accepted, then it is weighed and Paddy Purchase Register & Vendor Receipt is maintained with the
quantity and amount. Two numbers of cheques are prepared for the farmer, one for MSP and another for
the bonus, and these two cheques are handed over to the concerned farmers. Presently, bonus is
calculated @ Rs. 50/- per quintal as per the instructions from Govt. of India. Paddy Acceptance Note and
Transit Passes are prepared. Paddy Acceptance Note is maintained and transit pass is given to the Millers
to take the paddy from the Paddy Purchase Centre to their Mills. At the Paddy Purchase Centres, Stock
Register and Cash Book are also maintained. On a particular day, if excess paddy is procured beyond the
intake capacity of the millers, the balance paddy is sent to storage godowns for temporary storage, which is
of rare occasion. RMC gets 2% commission on MSPs for paddy procurement.

Each PPC prepares the daily Paddy Procurement Return report and sends to the Civil Supply Officer
(CSO). The CSO compiles the reports from all the PPCs and sends the report to the Head Office. Similarly,
the Head Office compiles the reports from all the CSOs and sends the state report to the Government.
Agency (Head Office) transfers the funds to the district office as per their requirement. In turn, the district
office transfers funds to different PPCs. The farmers receive cheques from the PPC for the paddy. The
farmers en-cash cheques at nearby bank.

Role of ICT in the Proposed System

a. Miller Registration : In order to make the system transparent Food supply and consumer Welfare
department has decided to make the ONLINE registration of the millers. At the beginning of the KMS,
they can register themselves by submitting the General Information i.e name of miller, location, storage
capacity, milling capacity , Electricity consumption, VAT no, Pollution control board certificate no etc.
Then CSO will verify the submitted information and will be allowed to participate in the paddy
procurement process. CSO can decide to allow the miller to participate in the procurement process
outside the district.

b. Paddy Procurement by OSCSC / MARKFED / NAFED / TDCC : OSCSC Ltd has procured dedicated
computer hardware and manpower at each district. Paddy purchase data related to OSCSC Ltd.
(except through PACS as Data Entry of PACS will be done at DCCB) will come to District on daily
basis. Each PPC shall be asked to maintain two sets of paddy purchase registers for this purpose. On
the same day farmers data will be entered into the application developed by NIC. The Data Entry
Operator will generate a checklist and submit to the Accountant for verification. Accountant will verify
each entry and put his signature. Thereafter it will be sent to the Designated banks at District
Headquarter. The Designated bank will prepare A/c payee cheques mentioning farmer’s name and his
account number as per the list and submit back to District Manager. District Manager shall
handover/transmit the cheques along with paddy purchase register to the Purchase Officer of
concerned PPC. Purchase Officer shall distribute the cheques to farmers.

c. SMS Delivery : The status of the Paddy Procured by each agencies is communicated to the Secretary
(FS&CW), Secretary(Agriculture), MD (OSCSC) , NAFED, MARKFED , RCS , All Collectors.

d. Acceptance Note of Paddy: An application has been developed to computerize the paddy handed
over to the miller from the PACS / Market yard through the transit pass and acceptance note.

e. Acceptance Note of Paddy : Similarly, When the miller goes for the delivery of the Rice after milling to
the RRC / FSD he will be issued with the Rice Acceptance Note by them . One copy of the same
comes to the district office for capturing the details.

f. Delivery Order and Enforcement Certificate : An application has been developed to submit the data
of the paddy received / Rice delivered by the miller. The enforcement officer verifies the mill and
submits the report ONLINE through a prescribed format . Once he / she submits it, information has to
be made visible to the CSO. He will check the information by going through the same and issue
enforcement certificate for Levy Rice. And he will also issue the Delivery certificate to the miller. As the
information has been entered for all the agencies they can generate the Delivery certificate for all.

g. Millers Bill : The Miller is engaged to lift the paddy from the Paddy Puchase centre and process it and
deliver at the Rice Receiving Centre. Once the cycle is completed he raises the bill as per the Rice
 delivered. The application is to verify the Rice delivered against the paddy lifted and also it takes care
of expenditure of Paddy and Rice related. Through this module OSCSC can track the bill submitted and
cleared of a miller for the financial year.

h. Delivery Order : For the Distribution of Rice, wheat , Sugar to the beneficiaries under different
schemes the Storage Agent has to lift the stock from the RRC or FCI (FSD) as per the order of the
CSO. In order to lift the stock he has to arrange the draft , approach the CSO office and gets the DO
and adjust the amount if any pending and goes to RRC / FSD to lift the quota. This application is
meant to issue delivery order for the storage agents of Orissa.

The main objectives of the project can be listed as:

• Farmers get immediate payment for their produce i.e. MSP at a nearby place.
• PACS are strengthened financially
• OSCSC Ltd. gets good quality rice for TPDS
• Miller agents are able to sustain themselves
• Issue of EC/ DC immediately
• Know the Quantity of Rice and Paddy Available for Distribution
• Issue of Delivery to the Storage Agent

Stake Holders:
 FS&CW Department
 All Agencies i.e OSCSC Ltd , NAFED, MARKFED , FCI , TDCC and sub Agencies PACS,
PaniPanchayat, WSHG
 Co-Operative Banks , Private Banks and Nationalized Banks
 District Administration, CSOs, SI & MI
 Farmers
 Miller Agents

The Participating Department(s) in the project are

1. Department of Food Supplies and Consumer Welfare

2. Department of Agriculture

Business Process Re-engineering

 There is a system available which will indicate the paddy purchased on daily basis and the
beneficiaries wand the cheque distribution to them.
 It was difficult to track the quantity of paddy lifted by the Miller Agent
 Accordingly the Rice was pending at the miller end months together.
 Difficulties in delivering the DC and EC as the Mill Verification Report was not available and
difficult to monitor how much Rice is pending for delivering.
 No mechanism to know the Bill submitted by the Miller for verification at the User end.
  It was difficult to issue delivery order as the stock position of RRC was not known and hence
difficult to make out commodity and Schemewise monitoring.

Features :

This Application is designed in order to work as per the Work flow Process of the existing system.The
different modules are

a. Paddy Purchase
b. Paddy Acceptance
c. Rice Acceptance
d. EC / DC
e. Millers Billing
f. Delivery Order

Implementation Strategy :

As the Application is web enabled application there was no need to go for pilot implementation. And it was
implemented for all the agencies i.e OSCSC / NAFED / MARKFED / TDCC etc. The application has
different modules and is user friendly. It captures all the details present in the paddy purchase register and
is based on work flow but due to non-availability of infrastructure it has been implemented at the District
level and block level. This captures the data at PPC level / District Level and then generates various reports
required for everyone. From this a checklist is generated which is verified by accounts manager before
sending to bankers. According to this the cheqeues are printed (A/C payee) and again delivered for
disbursement to farmers and data is updated.

 The copy of the purchase register is delivered through the motor bike rider everyday
evening at the district office.
 On the same day he will carry back the cheques to the PPC for disbursement to the
farmers.

When Miller lifts the Paddy and Delivers paddy he gives the paddy acceptance and issued with Rice
acceptance Note from which one copy is sent to the District office which are captured through the
application. It gives the status of paddy received by a miller and delivery of rice against him.

Similarly , when the Rice is ready for delivery , an inspection officer goes and verify the same and then
issue Delivery Certificate and if it is levy rice Enforcement Certificate is given through system to the miller
so that he can deliver the same at RRC. Once Rice is delivered at RRC then CSO gives delivery certificate
to the Storage agent under different scheme for distribution to the Retailer.

Once Rice is delivered , the miller submits bill and the data is verified through the acceptance note
submitted by him through application and then bill is released for payment. It keep tracks of the bill paid to a
particular miller in a Financial Year and doesnot allow to pay for the rice which has not been delivered.
Paddy Purchase Committee : The committee sits on every Monday to discuss the issue if any regarding
online flow of data from PPC. The meeting is presided by the Secretary (FS&CW)
 Paddy Procurement - 2010-11 (Khariff)
MARKFED
TDCC
5%
FCI 2%
NAFED 0%
6%

OSCSC
87%

Paddy Sold by Farmers 2010-11

Series1

303059

23523 11990 3086 75

OSCSC Nafed Markfed TDCC FCI

Challenges Faced
 a. The Paddy Purchase Centres are usually opened at GP Level where it was difficult to get good
connectivity, electricity so that the user can work on the system when the farmer will come to sell
his paddy he need not wait for long.
b. The handwritten registers were not legible sometimes.
c. The data was entered and got verified by the accounts manager were not willing to take the extra
burden.
d. At times the data handed over to bank was not verified properly for issuance of cheques.
e. Millers did not register online for participation in the paddy procurement process.They hesitated to
disclose their relevant information.
f. CSOs did not verify the millers and allow them to participate.
g. SI /MI were reluctant to enter the data of the verification of the mills and it created problem for
verification of DC / EC.
h. There were no proper co-ordination among the Accounts Manager and Asst Programmer.

Solutions and Lessons Learnt

a. It was decided to have two registers and one will be taken by the motor cycle rider and handed
over to the DEOs at district level for capturing the data and other one will be in use and vice versa.
b. The Offcials were trained during the training period to enter each parameter properly as they will be
in use at a later stage.
c. Intensive training were given to the DEOs / Asst Programmers / Bankers / MIs /Sis /ACSOs/
Accounts Managers/ CSOs and review were held.
d. Lessons Learnt : To make the project successful, each link of the process is important and they
have to trained properly. This should also reduce their routine activity so they will interested in
carrying out the job. For a successful project the main factor is that it should be work flow based
rather than only to capture information.
 Annexure – I
Paddy Procurement Report – OSCSC

District Wise Paddy Acceptance

Mill Wise Paddy Acceptance

EC / DC Issues

EC/ DC Issued
RRC Wise Acceptance Report

Mill Wise Rice Acceptance Report

Differential Report

Annexure - II
Paddy Procurement Application

Paddy Purchase Register

Paddy Purchase Register

PPC Wise Paddy Purchase

Paddy Acceptance by Miller

Paddy Acceptance Report

Mill Wise Paddy Acceptance Report

EC /DC Issued

Enforcement Certificate
Issuing new DC

Rice Acceptance Note

Rice Acceptance Report

Submission of Bill
Delivery Order