Why in News?

• The Union Cabinet has approved the formation of an Inter-Ministerial Committee (IMC) for facilitation of the “world’s largest grain storage plan in cooperative sector”.

What’s in Today’s Article?

• Storage of Foodgrains (FCI, Components, Challenges, Solutions, etc.)
• News Summary (About the Scheme, Significance, PACS, etc.)

Storage of Food grains in India:

• The procurement, storage, and distribution of food grains is undertaken by the Food Corporation of India (FCI), along with agencies of the state governments.
• The availability of food grains (even in adverse weather conditions or otherwise) at the country level has further been ensured with a carefully designed food security system by the government.
• This system has two components: (a) buffer stock, and (b) public distribution system.
• Buffer Stock –
  • Buffer Stock is the stock of food grains, namely wheat and rice, procured by the government through the FCI.
  • The FCI purchases wheat and rice from the farmers in states where there is surplus production.
  • The farmers are paid a pre-announced price for their crops. This price is called Minimum Support Price (MSP).
• Public Distribution System –
  • The food procured by the FCI is distributed through government regulated ration shops among the poorer section of the society.
  • This is called the Public Distribution System (PDS).
• At present, India’s foodgrains production is around 3,100 lakh tonnes while the storage capacity is only about 47% (1,450 lakh tonnes) of the total output.

What are the Challenges and Solution for those Challenges Associated with Foodgrains Storage?

• In August 2021, Standing Committee on Food, Consumer Affairs, and Public Distribution (Chair: Sudip Bandyopadhyay) submitted its report on challenges associated with foodgrains storage in India.
• Along with identification of challenges, the committee also suggested solutions for the same.
• Procurement –
  • The Committee observed that most of the procurement operations for foodgrains are carried out by state agencies. The share of FCI in direct procurement is less than five percent. 
  • The Committee recommended that the central government and FCI should assist the state governments in creation of adequate infrastructure for effective procurement.
• Decentralised Procurement –
  • Under the Decentralised Procurement Scheme (introduced in 1997-98), the state governments utilise the foodgrains procured locally from within the state for distribution under various schemes.
  • In case of excess procurement in any state, the foodgrains are handed over to FCI for storage or distribution to other states.
  • The Committee observed that even after 23 years of the inception of the scheme, it has been undertaken by only 8 states in case of wheat, and 15 states in case of rice.
  • The Committee recommended that the Department of Food and Public Distribution should encourage the adoption of the scheme in non-traditional states.
• Refusing Procurement at Centres –
  • The Committee noted that lower staff posted at procurement centres sometimes refuse to procure on non-bonafide technical reasons, such as moisture content in the produce.
  • This causes great hardships to the farmers, thus leading to distress sale.
  • It recommended that foodgrains should not be rejected on flimsy grounds if they conform to the Fair Average Quality norms.
• Storage Capacity –
  • The Committee noted that despite various audits for optimum utilisation of storage capacity, the utilisation of hired storage facilities is still very high.
  • Meanwhile, the FCI-owned facilities remain under-utilised.
  • The Committee recommended FCI to maximise utilisation of owned facilities before hiring.
  • Hiring should be done only if absolutely necessary to minimise the cost incurred in paying rent.
• Construction of Godowns –
  • The Committee observed that FCI could not achieve the targets for construction of godowns in 2020-21.
  • It recommended expediting the ongoing construction projects, particularly in the north-eastern states, Jammu and Kashmir, Andaman and Nicobar Islands, and Lakshadweep.
• Damaged Foodgrains –
  • The Committee noted a very high value of damaged foodgrains during 2017-20 (Rs 12.6 crore).
  • It noted that damaged foodgrains accrued mainly due to pest attacks, exposure to rain, floods, leakages in godowns, procurement of poor quality stocks, and negligence of officials.
  • It also noted a very slow movement of foodgrains to distribution centres, which leads to huge piling of foodgrains and rotting.
  • The committee recommended creation of storage capacity in: (i) major wheat producing states (e.g., Haryana and Punjab), and (ii) other states (e.g., Maharashtra, Tamil Nadu, and Rajasthan) where non-cultivable land may be available for this purpose.
• Transit Losses –
  • The Committee noted that despite various initiatives of the Department to reduce storage and transit losses of foodgrains, transit losses are still very high (Rs 281 crore during April-October 2020).
  • It recommended that strict action should be taken against negligent officials to hold them accountable for unjustified losses.
  • It recommended FCI to strengthen its vigilance mechanism in coordination with states and ensure proper functioning of monitoring mechanisms.

News Summary:

• The Union Cabinet has approved a Rs 1 lakh crore plan to create the “world’s largest grain storage plan in cooperative sector”.
• It will do so by convergence of various schemes of the Ministries of Agriculture and Farmers Welfare, Consumer Affairs, Food and Public Distribution and Food Processing Industries.
• To ensure timely and uniform implementation of the plan in a professional manner, the Ministry of Cooperation would implement a pilot project in at least 10 selected districts of different States.
  • The committee will be chaired by the Union Cooperation Minister.

Role of the Committee& Significance of the Plan:

• The committee will lay guidelines for creation of infrastructure such as godowns, for agriculture and allied purposes, at selected ‘viable’ Primary Agricultural Credit Societies (PACS).
• Under the plan, the government will create 700 lakh tonnes of grain storage capacity in the cooperative sector over the next five years.
• With this plan, farmers will now get modern grain storage facilities in their blocks through PACS, so that they will be able to get fair prices for their grains.