Tuesday, March 23, 2010


With food inflation showing continuous rise during the last few months, GOI is faced with the arduous task of evolving an effective policy, making use of the enormous food stocks available at its god downs that will arrest the spiraling prices. Its limited efforts to prevent milling industry to siphon off open market wheat by releasing the stock to them selectively at subsidized prices, have had no impact so far. The option of exporting wheat is a Hob-son's choice since it will bring down global prices of wheat further from the alarmingly low level of about Rs 850 quintal. Fortunately the Agriculture Minister has ruled out this possibility after initially proposing it.

"Availability of food grains at reasonable prices is the national objective of India's food policy. This is achieved through a network of 4.5 lakh fair price shops (FPS) where food grains are sold at lower than market price, with the government absorbing Rs 47,000 crore annually as food subsidy. This round-the-year distribution of food grains through public distribution system (PDS) is ensured by the Food Corporation of India, which maintain buffer stocks of rice and wheat. The buffer stocks norms for wheat and rice for this time of the year are 4 million tonnes (mt) and 12 mt, respectively. Against this, the current stocks with FCI and other state procuring agencies holding stocks on behalf of FCI are five times the norm for wheat and twice for rice at 20 mt and 24 mt, respectively. Production of wheat in Rabi 2010 crop is estimated to be a record 82 mt, up from 80.2 mt last year. FCI is expected to procure 24 mt of wheat in the coming season, beginning next month. Thus, the government is faced with problem of handling plenty amidst rising food inflation".

Most tragic outcome of this "no win" situation could be loss of about 10 million tons of grains stored under CAP storage system which is vulnerable to spoilage within a short time. Looking back GOI has to be blamed for lack of vision in taking up a program for building up large scale scientifically sound storage infrastructure for ensuring long term food security. It is time a thorough review is undertaken to decide on the best storage technology that can be deployed for extending the life of food grains without affecting adversely their nutritional and other quality features.


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