The Cabinet Committee on Economic Affairs (CCEA) on Friday approved to raise buffer food grain stocks with the Food Corporation of India, to cater to the rising needs of targetted public distribution system (TPDS) due to the implementation of the Food Security Act.
As per revised norms, the FCI will have to keep more grain — rice and wheat — in July and October, when the grain stocks held with it would usually be at higher levels.
The government fixes buffer norms for January, April, July and October. The Financial Express on November 19 had reported the government proposal to revise buffer stocks norms.
The move will help enhance the country’s ability to comply with the WTO norms on public stock holding for food security. The gap between buffer and actual stocks, flayed by WTO, would come down with Friday’s decision.
For better management of foodgrain, the CCEA also constituted an inter-ministerial group consisting of food, consumer affairs and expenditure secretaries to offload excess stocks in the domestic market through open sale or exports.
“The CCEA has given its approval to revise the buffer norms of foodgrain in the Central pool,” an official statement said.
As per the new norms, the FCI is required to hold 41.1 million tonne (mt) of foodgrain, mainly consisting of rice and wheat, on July 1, which is an increase of 9.2 mt from the existing norm.
Similarly, at the start of October, FCI grain stocks would be 30.7 mt which is an increase of 9.5 mt from the existing norm.
However, for April and January buffer-stocks norm, the CCEA has approved marginal changes from the current norms.
“The buffer stock norms have been revised as the offtake of foodgrain under the Targeted Public Distribution System (TPDS) has increased significantly in the last few years. Further, the National Food Security Act has also come into force with effect from July 5, 2013,” said the statement.
A food ministry official said that the proposed buffer stock norm, which was last revised in 2005, would help FCI in deciding the quantum of foodgrain to be stored for buffer purpose.
“The government should work out the norms based on the requirement of two months of operational stocks,” Ashok Gulati, former chairman, Commission for Agricultural Costs and Prices (CACP), had earlier stated.
Ahead of recommending increase in buffer stocks norm, the food ministry had consulted experts from various fields, including Ashok Gulati, Abhijit Banerjee, professor of economics, Massachusetts Institute of Technology, Boston and Mahendra Dev, director, Indira Gandhi Institute of Development, Mumbai.
At present, the buffer stock norms are aimed at ensuring grain supply for TPDS, food security during the periods when production declines and stabilising prices during production shortfall through open market sales.
“Higher buffer stock norms will give us cushion against holding on to higher foodgrain stocks against the present requirement. Besides we can take a call in advance about the quantum of exports and selling excess grains to private traders,” a food ministry official said.