Seven months after irregularities flagged, state committee recommends tightening MSP crop procurement rules

The recommendations entail that each SLA must have a state-level office and district/divisional offices and they should employ trained staff, including procurement and accounts personnel. These SLAs need to maintain a farmer network of at least 3,000 registered farmers per district and have links with at least 200 cooperative and consumer institutions.

The recommendations also call for SLAs to have financial strength of a minimum of Rs 10 crore share capital, Rs 100 crore working capital, Rs 200 crore turnover over five years, and Rs 100 crore net worth.

The report also calls for grievance redressal mechanisms, crop insurance, legal readiness for disputes, and a minimum Rs 10 crore equity contribution from the state government to maintain oversight. Blacklisted or non-compliant agencies will be barred from appointment.

The committee, chaired by Shridhar Thube-Patil, Managing Director of the Maharashtra State Cooperative Marketing Federation, included the Managing Director of NAFED in Mumbai, the state marketing director, the chief marketing officer of the state agricultural marketing board, and a former joint director of the Department of Co-operation, Marketing & Textiles. It held consultations with farmers, district officials, cooperatives, and the public to make the process transparent and inclusive.

It was set up following allegations that several SLA representatives, approved during the previous Eknath Shinde-led government, were demanding money from farmer producer companies to open procurement centres, imposing illegal charges on farmers, manipulating weighing at centres, appointing multiple family members to their boards, and securing political backing to become SLAs.

In an order issued February 17, the Devendra Fadnavis government had underlined “irregularities” in Minimum Support Price (MSP) schemes and selection of nodal agencies for crop procurement, and set up this panel to formulate a “comprehensive policy”  for SLA appointments.

The report notes that the number of SLAs in Maharashtra had risen from just two in 2022 to 45 under the previous government, far higher than the 1–4 typically seen in other states. Many of these agencies had little or no prior procurement experience but were allowed to operate under the PM-AASHA scheme, which guarantees up to 25% purchase of essential crops at MSP.

The recommendations, submitted by Thube-Patil to the Principal Secretary (Marketing), have now been sent to the state’s Marketing Department for approval.

“The Marketing department after reviewing the recommendations and taking feedback from the SLAs will be sending the report to the state government for its approval next week. Following which the government would formally take a decision on it,” a senior official from the state’s agriculture department said.

The new criteria once implemented are expected to significantly impact the functioning of existing and future SLAs. Existing agencies that fail to meet the prescribed eligibility may lose their status, while future SLAs will need to strictly comply with the rules to operate under the MSP framework.

Sources said most of the 45 SLAs, particularly those recently appointed, do not meet these criteria and lack prior procurement experience. Many are also linked to ruling-side politicians, including family members of MLAs and MPs.

In March, state Agriculture Marketing Minister Jaykumar Rawal told The Indian Express: “Most of these state-level agencies did not have a background in such purchases, and there were instances of irregularities. Initially, there were only two SLAs. Six were added during the MVA government, and now the number has reached 47, the highest in any state. Some traders and politicians were given permissions despite not meeting criteria. We formed the committee to set clear rules and ensure transparency.”

Officials said the new framework aims to streamline procurement operations, ensure compliance with the Centre’s PM-AASHA guidelines, and safeguard farmer incomes.