Indian Railways has come to Food Corporation of India?s (FCI) rescue in flood-hit Punjab and Haryana, where part of its foodgrain stocks have been rotting due to heavy rains. The national transporter has given a discount of 35% to the public sector food procurer to carry grains from northern India to other parts of the country.
The railways also expects to boost its own revenue by transporting a large volume of foodgrain. The discount will be valid from July 20 to March 31, 2011.
The FCI is the main supplier of foodgrain for public distribution system in the country, and Punjab and Haryana account for a major chunk of wheat and rice procurement by it. Sixty-six per cent of wheat and rice stocks of the organisation are in north India. Of this, 81% lie in Punjab and Haryana.
The discount on freight will be available on incremental loading of foodgrain on BOXN wagons (a type of open-top wagon). The discount is being given through an amendment to the policy on ?freight incentive schemes and transportation products? that was notified in the second half of 2009.
The policy had offered a discount of 20% to suppliers of foodgrain, cement, fertilisers, etc. A discount of 30% was offered for fly ash and urea. Coal, iron ore, container traffic and military traffic were kept out of the purview of the policy.
?We always give priority to the FCI while giving concessions on transporting commodities. This measure has been taken to ensure adequate distribution of foodgrain across all warehouses of the organisation. This would control the prices of the grains to some extent, especially for the below poverty line people,? a senior railway official told FE. Calls made to FCI chairman and managing director Siraj Hussain went unanswered.
Food inflation rose to 12.81% during the week ended July 3 from 12.63% in the previous week, shows the latest government data. Price of rice went up 6.1% during the week, while that of wheat rose 5.54%. According to reports, the FCI was facing a shortage of warehouses and left part of procured foodgrain in open in Punjab and Haryana.
Rains have destroyed standing crops at various places of north zone too. Official data from the two states as on July 1 show that paddy was sown on 15.23 lakh hectare in Punjab and 1.1 lakh hectare in Haryana.