Domestic foodgrain procurement serves the dual purpose of building stock for public foodgrain distribution system (PFDS) and providing income support to farmers. The success of foodgrain procurement policy depends on three factors: (i) price responsiveness of the farmers,(ii) procurement price compared to the market price and (iii) administration of procurement. Domestic procurement targets are generally set based on gross production prospects and distributional requirements. The purpose of providing incentives to farmers is better achieved if procurement is done directly from farmers in the form of paddy. Historically this policy has not been properly pursued because of reasons such as distance of the procurement centres form the farm, reported non-compliance by farmers of maintaining the required moisture content of paddy and unwillingness of the procurement personnel to buy paddy in smaller quantities, and also their mind set of favouring the millers, not the farmers.