Food Corporation to implement major recommendations of high-level panel

NEW DELHI: In a major boost to reforms in food procurement and distribution, the Food Corporation of India (FCI) has assured the government it will be able to implement major recommendations of the high-level panel that has recommended a complete revamp of the body that plays a key role in the country’s food security.

The panel has made path-breaking recommendations such as direct cash transfer for fertilizers and grains that will help eliminate huge leakage of subsidy and allow market forces to operate. It also wants FCI to withdraw from major north Indian states and focus on eastern and northeastern states, boost operational efficiency and stop open-air storage of grains.

“A number of recommendations can be implemented by FCI alone, others by the department of food and public distribution and by the department and the rest by the Centre,” said an FCI official. Ahead of Food Minister Ram Vilas Paswan’s meeting on February 11 to review the recommendations, FCI officials on Wednesday met food secretary Sudhir Kumar.




FCI officials said that the panel’s recommendation of phasing out of open-air storage of grains can be implemented. Grains under such storage fell from 27.4 million tonnes in June 2012 to 6.21 million tonnes in January this year. “We will immediately aim that no grain remains in CAP (covered and plinth) storage for more than three months,” said the official. The officials said that FCI is now concentrating on states in eastern and northeastern part of the country.

“On February 10, food secretaries of Bihar, West Bengal, Jharkhand, Uttar Pradesh and Assam will have a meeting with FCI officials in Delhi. Private companies which would like to participate in procurement operations – from Adani and Cargill to ITC – will also be invited,” said an official privy to the meeting.

He added that in a state like Bihar where wheat production was about 6-6.5 million tonnes, there was nil procurement by FCI or state government agencies.

Officials said that the state governments need to set up mandis, appoint block level officials and build up infrastructure to ensure farmers get remunerative prices. “We can ensure that each state, especially which has deficit grains, has storage of grains for at least three months of their consumption requirement,” the official said, adding that in the next few months tenders will come up for building silos on FCI land under public-private partnership. FCI is also open to outsourcing the management of storage and handling.

It has indicated that the focus should move to bulk handling rather than jute bagged. Further, FCI could reorient and restructure itself into an agency for innovation in food management system, officials said. Mechanisation of depots which have departmental labour is a priority issue, especially at a time when FCI is short on labour and staff. Also, the movement of grains could be gradually containerized, officials said.

However, officials said, the food departments needs to weigh in on issues such as scaling down commission uniformly to 3%, beefing up negotiable warehouse receipt system and providing ration for six months at a time to beneficiaries under public distribution scheme.

Similarly, recommendations from reducing coverage under National Food Security Act to giving subsidy directly to farmers will have to be implemented by the Centre and other government agencies, officials said. A panel headed by former Himachal Pradesh chief minister Shanta Kumar to improve FCI’s operational efficiency and financial management, as well as overall improvement in management of food grain, had submitted its report on January 19.