The foodgrain stocks held with Food Corporation of India (FCI) and state government-owned agencies has declined to 48.3 million tonne (MT) at the start of the month from 52 MT reported a month back.
According to latest data, the government agencies have rice and wheat stocks of 13.8 MT and 34.4 MT, respectively, on September 1. Besides, around 2.4 MT of rice is yet to received from the millers.
The current volume of grain stocks is still higher than the buffer stocks norm of 30.7 MT required at the start of October. A food ministry official told FE that the corporation’s current rice stocks of around 13.8 MT is well within the requirement of buffer stocking norms for October, when FCI needs to have 10.2 MT of grain.
However, the official said that the real worry for the FCI is the huge wheat stocks in excess of 34.4 MT, of which more than 28 MT of grain had been purchased from the farmers during April – June this year.
As reported earlier, a major chunk of wheat procured this year from the farmers of Punjab and Haryana under relaxed norms because of unseasonal rains hit the quality of produce.
By October, FCI needs 20.2 MT of wheat under buffer stocking norms, thus marking rest of quantity of wheat as ‘excess’. The corporation requires around 20 to 22 MT of wheat annually for distribution through the public distribution system (PDS). “We have around 8 – 10 MT of excess wheat stocks,” the official said.
Meanwhile, the Open Market Sale Scheme (OMSS) for selling excess wheat stocks to bulk buyers has picked up pace in the last couple of weeks. More than 3 lakh tonne of wheat has been sold to bulk buyers under OMSS so far.
Earlier, the government had continued with the OMSS wheat in non-procuring states after April 1, yet the response was lukewarm during the April – June period. Usually, FCI runs OMSS operations during the September – March period.
According to food ministry officials, the FCI is targeting at selling at least 6 MT of wheat under OMSS in 2015 – 16. FCI had sold 4.2 MT of wheat under OMSS in the previous fiscal.
The high-level committee (HLC) for FCI restructuring, chaired by former food minister Shanta Kumar, in its report earlier this 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”.
The HLC had stated that the current system is extremely ad-hoc, slow and expensive. “A transparent liquidation policy is the need of hour, which should automatically kick in when FCI is faced with surplus stocks than buffer norms.”