Answer:

While the Indian agriculture on a whole grew at a rate of 4.1 percent for 11th FYP, there was no commensurate increase in per capita food grain availability. A lot of this gap between production and availability to end user can be attributed to various lacunae in the way we manage food grain as it moves from the producer to the consumer.

A majority of our population is dependent on PDS, managed by FCI making government the largest procurer of food grains in the country. This structure faces is plagued by a myriad of inefficiencies like:

♤ FCI was set up in 1965 with the twin objective of procuring food grains for the government’s food policies and to offer some support to farmers who can sell their produce at the government-mandated minimum support price (MSP). However over the years with increase in MSP and inability of FCI to move grains out of its storage quickly, has resulted in making FCI one of the largest hoarders of food grain in the country. It currently holds more than four times the required buffer stocks. This stock can be safely off loaded in the open market to increase the net food availability.

♤ Lack of adequate capacity with FCI to store the procured grains leading to wastage, rotting of food grains etc.

♤ The centralized procurement and storage of food grains makes the cost of taking food to go-downs and to consumers cost more than the food procurement at MSP. There is a need to encourage local procurement and storage model. This will further increase the local food grain availability.

♤ Lack of accountability is the central issue. FCI is neither a PSU- company nor a government department as it is formed under the Food Corporation of India Act of

1964.The FCI Act itself says all its expenses will be borne by the centre. So there is no accountability inherent in the structure. It’s neither a government department which is accountable to parliament nor is it a PSU which is accountable to shareholders.

♤ There is a need to change storage technology. Following tradition, FCI stores grain mainly in jute sacks; but this causes problems as the gunny sacks are easily damaged by rodents. This has lead to huge food grain losses over the years. Instead we need to move towards grain silo which is a concrete or metal structure where grain is stored loose and not in bags.

♤ Cost is the biggest problem at FCI. FCI's biggest cost is its labor.- it has a staff strength of over 36,000 employees and 18,000 loaders. Rationalization of operational costs can make it possible to invest more on increasing storage capacity and improving it distribution system.

In future we will continue to focus on increasing agricultural production because of its benefits to rural economy. This coupled with the need to feed our increasing population makes it imperative that FCI to resolve the above lacunae in a time bound manner.