Saddled with excess wheat stock, the food ministry has decided to move a Cabinet note for additional allocation of around 3.5 lakh tonne of wheat to states to be distributed through the public distribution system (PDS).
Sources told FE that under the proposal those states, which are yet to implement National Food Security Act, will be eligible to get additional quantity of wheat along with usual allocation under PDS.
Around 2.8 lakh tonne of wheat would be offered to above poverty line (APL) families while around 67,000 tonne of grain would be distributed amongst below poverty line (BPL) families. The Centre provides wheat at R6.10 and R4.15 per kg for the APL and BPL families, respectively to the states under the PDS.
A food ministry official said that extra allocation is key to reducing excess wheat stocks as a major chunk of grain purchased this year have been through under relaxed specification (URS). This implies that the grain cannot be stored beyond 10-12 months.
The ministry had to relax norms for wheat procurement this year after unseasonal rains and hailstorms in March affected the crop in the key growing states of northern India.
Sources said that out of 28 million tonne purchased from farmers in rabi or marketing season for 2015-16, around 20 million tonne of wheat had been procured under relaxed norms in Punjab, Haryana and Uttar Pradesh.
“We need to liquidate the wheat procured this year as soon as possible,” an official said.
Besides extra allocation to states, FCI has been conducting weekly auction to upload extra wheat stocks under Open Market Sale Scheme (OMSS) to bulk buyers and is aiming at selling around 6 million tonne of wheat under OMSS by the end of March 2016.
The corporation has already modified the ‘first in first out’ (FIFO) policy this year as most of the grain procured this year suffers from lustre loss and cannot be stored for a long period.
Under the FIFO policy, FCI supplies food grain, mostly consisting of rice and wheat, to PDS from the previous year’s stocks, while the new crop is stored.
“A major chunk of wheat procured does not suffer from any nutritional deficiency, but because of lustre loss the grain can’t be stored beyond a year,” a ministry official said.