The Indian government is mulling a proposal that it procure paddy directly from farmers at the minimum support price (MSP) in the ensuing kharif season, and pay to have it milled at rice mills.

The idea was proposed by a committee charged with studying patterns of procurement on a recent tour of the Punjab region. The committee consisted of the Secretary of the Food and Agriculture Department, K. Ratna Kishore, and D. Sambasiva Rao, MD of MARKFED.

The committee also suggested giving MARKFED loans to farmers with superior varieties so they can hold the stock for up to three months, and sell when the market is favourable. This scheme, under the "Rythu bandhu" title, sees MARKFED gives 75% of the produce cost as interest free loans to farmers for up to three months.

Currently, the government procures rice through the Food Corporation of India and the State Civil Supplies Corporation under price support operations.