Foodgrain stocks with FCI decline to lowest in 5 years

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Published: April 17, 2015 12:07:21 AM

The foodgrain stocks held with Food Corporation of India (FCI) have fallen to the lowest level in last five years...

The foodgrain stocks held with Food Corporation of India (FCI) have fallen to the lowest level in last five years, mainly because of decline in grain procurement and the corporation selling a chunk of wheat stocks in the open market.

As per the latest data, FCI has grain stocks of 41.03 million tonne consisting of rice (23.7 mt) and wheat (17.2 mt) on April 1 against the prescribed buffer norms of 21.04 million tonne.

However, the grain stocks have fallen by more than 45% from an all-time high of 59.75 million tonne held by FCI two years back.


In the last two years, FCI has sold more than 10 million tonne of wheat in the open market while the wheat procurement has dropped from 38.1 million tonne to 28 million tonne. Similarly, the rice purchase by FCI and state government-owned agencies have declined to 31.8 million tonne from 35 million tonne in the last two years.

“We have reduced grain stock substantially yet it is far above buffer norms prescribed by the government,” a food ministry official said.

FCI has more than 17.2 million tonne of wheat at present against the buffer norm of 7.4 million tonne. In a bid to liquidate excess stocks, for the first time this year, the government has already allowed FCI to continue with Open Market Sale Scheme (OMSS) beyond March 31 in non-procuring states such as Odisha.

Besides, the government has commenced sale of rice under OMSS for the first time.

The high-level committee (HLC) for FCI restructuring chaired by former food minister Shanta Kumar in its report had observed that during the last five years, on an average, “buffer stocks with FCI have been more than double the buffer norms costing the nation thousands of crores of rupees loss without any worthwhile purpose being served”.

HLC had stated that the current system is extremely ad-hoc, slow and costs the nation heavily. “A transparent liquidation policy is need of the hour, which should automatically kick-in when FCI is faced with surplus stocks than buffer norms. Greater flexibility to FCI with business orientation to operate in OMSS and export markets is needed,” the committee had observed.

At present, the buffer stock norms are aimed at ensuring grain supply for targeted public distribution system (TPDS), food security during the periods when production declines and stabilising prices during production shortfall through open market sales.

The Cabinet Committee on Economic Affairs (CCEA) in January, 2015 had approved hike in norms for the foodgrain stocks held by FCI.

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