1. Food Corporation of India has Rs 10,000 crore of phantom rice stocks

Food Corporation of India has Rs 10,000 crore of phantom rice stocks

FCI is holding roughly two-and-a-half times the amount of wheat and rice it needs.

By: | New Delhi | Updated: December 1, 2014 4:47 AM
FCI is holding roughly two-and-a-half times the amount of wheat and rice it needs. (Reuters)

FCI is holding roughly two-and-a-half times the amount of wheat and rice it needs. (Reuters)

Thanks to its granaries overflowing, Food Corporation of India’s (FCI) is unable to keep tabs on foodstocks it is supposed to have. At the last count, over R10,000 crore of FCI’s rice stocks were missing. While the paddy had been procured and was supposed to have been given to the millers, close to 6 million tonnes (mt) of stock is yet to come back to the FCI storehouses. The food ministry has given FCI till the end of next month to retrieve these. The value of R10,000 crore is based on that year’s procurement price and does not include the cost of purchasing and other expenses.

FCI is holding roughly two-and-a-half times the amount of wheat and rice it needs; it has 30.1 mt of wheat stock as compared to the October 1 buffer of 14 mt  and 23.1 mt of rice as compared to the buffer of 7.2 mt.

Compared to FCI’s procurement, the amount is quite large — 11.2% in 2012-13 and 6.8% in 2013-14. But in terms of the stock FCI is showing on its books — 23.1 mt of rice versus the buffer norm of 7.2 mt — the missing rice adds up to a whopping 26%. “We can understand the delay of a few months in milling, but if the rice is not received after more than a year of paddy procurement, it raises doubts as to whether the state governments even procured that much rice,” a senior official said.

graph-food-corporation

Under what has been proposed, if the outstanding stocks are not realised by the end of next month, this will be written off at the expense of the state governments. The largest chunk of the missing rice comes from states like Bihar, Chhattisgarh, Madhya Pradesh and Odisha.

In 1997-98, the states where FCI was not procuring rice were allowed to procure from farmers on behalf of FCI. Once these states met the requirement of their ration shops, the surplus was supposed to be deposited with FCI in its central pool.

In 2012-13, 10.86 mt of rice (in terms of paddy equivalent) was procured from these four states, and 3.82 mt of that remains with the millers.

In 2013-14, 9.37 mt was procured in these states, and of this, 2.15 mt has not been returned to FCI.

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