Transparent Distribution of Subsidy on Hybrid Seed during Kharif 2015

New Delhi, 22.9.2015

Amit Mohan PrasadPr. Secretary, Uttar Pradesh

Traditional system of “At Source Subsidy”

Weaknesses:List of beneficiaries not available leading to

crisis of credibilityPlethora of complaints year after yearBalance sheet not prepared since 2005-06Chances of misappropriation etc can not be

ruled outDistribution of subsidy in a non-transparent

methodDissatisfaction among stakeholdersHence, we decided to try out DBT

Distribution through DBT

CHALLENGES:Recordkeeping of distribution was manual,

hence not possible to avoid duplicationAvailability of data of farmers along with

their bank account numbers etc Farmers do not have capacity to pay upfront

the full price of the seed Shortage of staff in the department at the

block level for disseminationBringing different stakeholders on board to

cooperate with the new system

Subsidy on Hybrid Seeds

Hybrid seed is a high value itemAs compared to Rs 30/kg for certified seed of

paddy, the price of hybrid seed of paddy can be anywhere between Rs 250-300/ kg; Similarly for other crops

Land holdings are very small in UP, particularly Eastern UP

Hence the farmers use hybrid seed of paddy in larger numbers as compared to Western UP, where mostly scented rice is grown

High value of hybrid seed makes it prone to diversion to the market etc.

Subsidized Seeds through DBT

Strengths: A new scheme called “Kisaan Pardarshi Seva

Yojana” was already in place Under this farmers were being registered for

transparent distribution of inputs Copy of Land Record, Bank Passbook and

Identity Proof of the farmer is collected along with his Bio-metric

Farmers have to register On-line on the web portal of Agriculture department

Farmers can register at Lokvani Kendra, Cyber Cafes and also at DDA/DAO/Block office

Decision to go for DBT

The new system was going to hit the vested interests of many stakeholders, hence it was a difficult decision to take

The state government after due deliberation and considering all aspects of the existing system decided to go for the changed system of DBT for hybrid seeds

Decision was taken at the highest level to implement the changed system and government order was issued on 15.4.15

Registration of farmers for getting hybrid seed on subsidized basis started on the 16th of April, 2015

The Process (Contd.)

Due to complaints, the payments of the hybrid seed companies was held up for 2014 and also partially for 2013

For 2015, all the big companies refused to participate in the traditional system of hybrid seed distribution because of this

A meeting of hybrid seed companies was convened to take them on board to implement the new system

When they realized that they will get their full payment in one go from the farmers, they agreed to participate in this

The Process (Contd.)

A meeting of the departmental officers was also convened and the decision of the state government to go for the new system was conveyed to them also

There were some apprehensions in their minds as they had this “fear of the unknown”

However, after some explanation about the new system, they also saw the merit of this and agreed to implement it wholeheartedly

Other agencies, which were involved in the distribution of hybrid seeds, also grudgingly agreed

Actual Distribution

Companies were asked to set up retail counters at the block level seed godown store of Agriculture Department

Only varieties notified for UP were allowed to be sold at subsidized rates

Companies were asked to give an undertaking that they will not sell these seeds at a lower rate in the open market

Bank guarantee was taken for the performance of seeds

Prices were pegged at the level of 2014 after some discussions with the companies

Farmer had the freedom to buy a variety of his choice

The Process

Farmers started registering for hybrid seedsIn the beginning, the last date of registration

was 26th of April which was extended many times to ensure that no willing farmer is left out

This was done in different stretches as we also wanted to assess our ability to supply, given the limitation of budget

Distribution of hybrid seeds was started early on 1st of May, so that no one can blame the new system for unavailability of seed

Distribution at Bakshi ka Talaab, Lucknow

In Barabanki District

The Process

After buying hybrid seed at full rate from the seller, farmer was required to deposit a copy of the receipt and a duly filled pre-designed form to the govt. employee at the seed store

A beneficiary list was prepared on the basis of the documents received

Bills were submitted in the treasury for direct subsidy transfer in to the bank account of the farmer

Treasury, after due verification of budget and the other records, transferred the amount to the farmers’ accounts

The Result

No. of Farmers registered for hybrid seeds: 5,10,867No. of Farmers who actually purchased: 1,46,085Admissible Subsidy Amount : Rs. 23.77

Cr (State Govt. gives a subsidy of Rs 80/kg for hybrid

paddy seed and Rs. 50/kg for hybrid seeds of other crops; another Rs.50/kg comes from the centrally sponsored schemes)

• The distribution has been totally transparent and accountable

• It has resulted in huge savings as it has plugged the leakages!

What Next?

Farmers have welcomed this new system whole heartedly even though they have to pay the full price upfront

After they actually got the admissible subsidy into their bank accounts, they demanded that the same system be implemented in Rabi also for the certified seeds

State Government of Uttar Pradesh has decided to go for it during Rabi also!

Government order issued on 17.8.2015

Their Smiling Faces are Our Biggest Reward!

Thank You!