FCI’s procurement role very low, and reducing

May 06 2014, 21:48 IST
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SummaryAnd, given the 40-50% leakages, its distribution record is more than patchy

While the BJP’s manifesto talks of unbundling Food Corporation of India’s (FCI) operations to improve its efficiency, the reality is that FCI’s role in procurement is already very limited and, in the case of paddy, diminishing.

Including the 172 lakh tonnes of capacity it rented in 2012, the CAG reported, FCI’s storage capacity is less than half of what it needs. And, given the 40-50% leakages, its distribution record is more than patchy.

FCI’s share in the country’s annual paddy procurement declined from 5.7% in 2010-11 (October-September) to 1.5% in 2013-14. In the case of wheat procurement, while the FCI’s share has been in the range of 13-15% in the last four marketing years, it remains at just around 15%.

FCI officials say the state procurement agencies that handle the bulk of the grain procurement would now be required to create modern facilities for long-term storage.

Close to the consumers, the state agencies would be in a better position to release grain to the targetted public distribution system. This would help curb food inflation.

Close to half of India’s 61 million tonne of grain storage capacity is currently stored Covered & Plinth (CAP), where the grain can’t be stored for more than six months, leading to wastage. A lesser FCI role in intra-state transportation would mean that it would focus more on inter-state transportation and creating silos (modern storage means) that could store grains for longer periods.

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