Mumbai: The government has announced a bonus of Rs50 per quintal over and above the Rs850-880 a quintal minimum support price (MSP) for paddy, taking the procurement price of the foodgrain to Rs900-930 a quintal.

With the minimum support price for paddy currently standing at Rs850 per quintal for the common variety and Rs880 a quintal for Grade 'A' variety, the effective procurement price after the bonus would be Rs900 per quintal for common variety and Rs 930 per quintal for Grade A variety.

The cabinet committee on economic affairs today gave its approval for incentive bonus of Rs50 per quintal on paddy over and above Minimum Support Price for the entire Kharif marketing season 2008-09, a government press release said.

"The cabinet committee on economic Affairs today gave its approval for incentive bonus of Rs50 per quintal on paddy over and above the Minimum Support Price for the entire Kharif Marketing Season 2008-09," told reporters here after.

Announcing the decision after the CCEA meeting, minister for science and technology Kapil Sibal said the additional incentive has been provided to boost procurement as well as production.

The Food Corporation of India has so far procured over 5.6 million tonnes of paddy, out of arrivals of about 6.3 million tonnes against last year's procurement of 5.6 million tonnes out of 7.5 million tonne arrivals.

While the procurement ratio has been higher this time around, arrivals of foodgrain in markets were less less compared to last year because of low prices offered, officials pointed out.

The centre procured 28.5 million tonnes of paddy in 2007-08 marketing season (October-September) on the back of record production of over 96 million tonnes. The country is estimated to produce 83.25 million tonnes in the current Kharif season, the harvesting of which has already begun.

Agriculture minister Sharad Pawar, meanwhile, reiterated the government's policy not to promote bio-energy at the cost of food security.

Addressing a World Food Day function in New Delhi, Pawar said ''conversion of foodgrains and edible oil seeds for producing bio-fuel will create food security concerns, as is evident already. While the quest of the world community for finding sustainable alternatives to fossil fuels is well appreciated, manufacture of bio-fuels at the cost of foodgrains needs to be examined in more depth. The impact of diversion of land which grows cereal for human consumption into production for bio-fuels is likely to be self-defeating. India's policy, therefore, has been for the use of non-cereal biomass, crop residues and for cultivation of jatropha on degraded and waste land for bio-fuel production.''