A food ministry official told FE that the corporation's current rice stocks of 14 MT (including the grain to be received from millers) is well within requirement of buffer norms for October, when FCI needs to have 10.2 MT of grain.
The foodgrain stocks held with government-owned Food Corporation of India (FCI) and state government-owned agencies have declined to 45 million tonne (MT) at the start of the month from 48 MT reported a month back.
The current volume of grain stocks, mainly consisting of rice and wheat, is still higher than the buffer stocks norm of 30.7 MT required at the start of October. However, the grain stocks is lower than the 47.6 MT tonne of grain stocks reported a year back. According to the latest data, the government agencies have rice and wheat stocks of 12.5 MT and 32.4 MT, respectively, on October 1. Besides, around 1.5 million tonne of rice is yet to be received from millers.
A food ministry official told FE that the corporation’s current rice stocks of 14 MT (including the grain to be received from millers) is well within requirement of buffer norms for October, when FCI needs to have 10.2 MT of grain.
However, the official said that the real worry for the corporation is the huge wheat stocks in excess of 32 MT of which more than 28 MT of grain had been purchased from the farmers during April -June this year, of which a major chunk is bought through relaxing norms.
By October, FCI needs 20.2 MT of wheat under buffer stocks norm, thus marking rest of quantity of wheat as ‘surplus’. 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 wheat stocks to bulk buyers has picked up pace in the last couple of weeks. More than 8 lakh tonne of wheat has been sold to bulk buyers under OMSS last three weekly auctions. Earlier, the government has continued with the OMSS wheat in non-procuring states after April 1, yet the response was lukewarm during April — June period. Usually FCI runs OMSS operations during September — March period.
FCI is targeting at selling at least 6 MT of wheat under OMSS in 2015 – 16. “The open market wheat sale is expected increase during the next few months because of festive seasons,” an official said. The corporation 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, “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.” 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.”