Procurement:

FCI procures wheat, Paddy and rice for which the minimum support price (MSP) is announced by the Govt. of India well before commencement of Rabi and Kharif Marketing Seasons alongwith specifications. Only fair average quality (FAQ) foodgrains of laid down specifications by Govt. of India are purchased.
The purchase centres during procurement are operated to facilitate the purpose of foodgrains from farmers in such a manner that farmers need not to cover more than 10 K.Ms. Purchase centres are allotted by State Govt. among the procuring agencies i.e. FCI and State Govt. Agencies. The allocation of purchase centres is decided by concerned State Govt. along with the share of procurement of procurement of wheat and paddy. If the farmers able to get a higher price, they are free to sell their produce to the traders/food grains dealers. Levy rice is collected from of levy share from the rice millers. Percentage of levy to be collected in various states & levy price is decided by the concerned state govt. in consultation with the ministry of CA, F&D before the start of marketing season. In main procuring states of Punjab and Haryana, the levy percentage is 75%.
In Utter Pradesh and Uttarakhand, the procurement has been decentralized procurement system the respective State Govt. purchae, store & distribute to level of their TPDS requirement & only the surplus is taken over by FCI under central pool.

The decentralized procurement scheme has been adopted to have the following advantages:

In normal monsoon years, the state is surplus both in wheat  & rice.
FCI is functioning in Rajasthan since 1.1.66 and activities of procurement, storage, preservation of stocks and distribution have been undertaken successfully. The agricultural production in the state mainly depends on monsoon/irrigation potential which is very low in comparison with the vast land of the state. The area of Sri Ganganagar, Hanumangarh, Kota & Banswara districts is having canal facility. Other districts mainly depends on the wells and minor irrigation projects. In Rajasthan the levy percentage is 50%. The main crop is wheat, Paddy and cereals i.e. Bajra, Maize and Jowar which are not procured by FCI. These are procured by the state govt.
In Delhi, HP & J&K Regions which are non-procuring states. These states are deficit states. The levy rice fixed by State Govt.  in HP 50% and  in J&K there is no levy.
Though all surplus stocks i.e. wheat & rice is procured for central pool in Punjab & Haryana, procurement of paddy is also very important operation which is undertaken on very large scale. In order to extend support price to the farmers, paddy procured by FCI as well as state Govt. agencies on behalf of FCI is milled which is itself is a very important process.
Procurement of wheat & rice during the last 5 years is enclosed at Annex.I.