From the level of more than double the prescribed buffer stocks four years ago, the Food Corporation of India’s grain stocks have reduced to less than a quarter above them, as procurement slowed and open-market sales picked up.
As on October 1, 2016, the stocks of wheat and rice plunged to 37.5 million tonnes (mt) from 45 mt a year ago and 66.5 mt at the same time the previous year. So, the gap between the buffer and actual stocks is now just 6.7 mt, compared with 36 mt in 2012. Economical procurement, coupled with low stocks, have helped the government save thousands of crores.
The excess grain stocks with FCI have been consistently declining after reaching its peak in 2012. The grains stocks have reached its lowest level in the last five years because of a sharp fall of 18% in wheat procurement in the recently concluded rabi marketing season (2016-17) and selling of excess stocks to private bulk buyers through the open-market sales scheme.
As per the buffer stocks norms, FCI should have a grain stocks of 30.7 mt on October 1. Currently, the corporation has 21.6 mt of wheat stocks against the buffer of 21.5 mt while its rice stocks are about 16 mt as against 10.5 mt buffer. “We have excess rice stocks against the buffer norm while in case of wheat, the stock levels are close to the norm because of OMSS sales,” an official told FE.
A high-level committee (HLC) for FCI restructuring chaired by former food minister Shanta Kumar, in its report submitted last year, had observed that “during the last five years, on an average, buffer stocks with FCI have been more than double the buffer stocking norms, costing the nation thousands of crores of rupees loss without any worthwhile purpose being served”.