The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi,  gave its approval to reimburse amount of value cut on wheat procurement price to States.

 This decision has been taken in order to give relief to the farmers affected by the unprecedented rains and hailstorms. The Centre will reimburse the amount of value cut imposed on the wheat being procured by the Food Corporation of India (FCI) and State Government Agencies in Gujarat, Haryana, Madhya Pradesh, Punjab, Rajasthan and Uttar Pradesh under relaxed quality norms. The reimbursement of this amount will be made to the State Governments through the FCI. State Governments have decided to bear the amount of value cut imposed on the wheat being procured from farmers by the FCI and State agencies under relaxed specifications in the current Rabi marketing season,

 As per latest report of FCI, a total quantity of 158.61 lakh tonnes of wheat has been procured during the current season in various States as against the procurement level of 169.29 lakh tonnes achieved by this date in previous year.

Background:-

 Due to untimely rains and hailstorms etc. in March-April this year, the quality of wheat has been badly affected and to facilitate purchase of affected wheat from the farmers at the Minimum Support Price (MSP), the Food Ministry has given relaxation in quality norms of wheat with respect to luster loss and increase in quantum of shriveled and broken grains in various States. While doing so, the Food Ministry has imposed a nominal value cut on wheat procured under relaxed specifications, so that, separate marking and stocking of such stock and its utilization on priority could be ensured. Looking at the problems of the farmers, most of the State Governments have decided to bear the amount of this value cut themselves and not to pass this on to farmers.

Reimbursement of value cut: Centre to compensate States for wheat procurement reductions under relaxed quality norms following crop damage. The Union Cabinet approved central reimbursement to State Governments for the value cut applied to wheat procured under relaxed quality norms after weather-related damage, with payments routed through the Food Corporation of India so farmers are not burdened by deductions while procurement at the Minimum Support Price continues.