FOOD GRAIN MANAGEMENT IN INDIA

PRESENTED BY:-
RICHA SHARMA
09MB-29
 OVERVIEW

 Food grain management in INDIA is all about- Procurement, Storage &

Distribution of food grains in the country.

 The focus is on the attainment and maintaining self-sufficiency in foodgrains to

achieve food security.

 In 1965 - to disseminate high-yielding varieties and ensure low-priced food to

consumers led to the creation of the Food Corporation of India (FCI) and the
Agricultural Prices Commission (APC).

 The government follows a dual pricing policy -

 procurement price at which it would purchase grains from farmers,
 ration price (lower than the retail price) at which it would sell limited
quantities of grains as entitlement to households through Fair Price Shops (FPS).
 The instruments for food management are-
 MSP(Minimum Support Price)

 CIP(Central Issue Price)

 The TPDS( Targeted Public Distribution System)operation since ,

1997-food grains management by State Govt.

 Food stocks are maintained by Govt for-

 Meeting the prescribed min. Buffer stock norms for food security.

 Monthly release of food grains through PDS.

 OBJECTIVES
 Procurement of food grain from farmers at remunerative
prices.
 The procurement price is set by- the Commission for Agricultural Costs
and Prices (CACP)
 Based on considerations of –
 cost of production
 a “fair” return to land and family labour of the farmers

 A system of open-ended procurement

 FCI is obligated to buy all the grains that farmers offer to sell at the
prescribed procurement price as long as the grains meet a certain quality
standard .
 The foodgrains stocks procured by the FCI consist of operational stocks and
buffer stocks.
 The operational stocks are used for distribution through the Public
Distribution System (PDS) and for various welfare schemes.
 Each year, the Food Corporation purchases roughly 15-20% of
India's wheat production and 12-15% of its rice production.

 Foodgrains are being provided for various employment programs

such as the Food-for-Work programme, National Rural
Employment programme (NREP), the Rural Labour Employment
Guarantee programme (RLEGP), the Jawahar Rozgar Yojana
(JRY), etc.
 Distribution of food grains to the
consumers.
The food grains are procured from the producers at minimum
support prices and distributed among the consumers, at uniform
prices, all over the country.

 The PDS has been able to check black marketing and hoarding of essential
food grains.

 The govt. runs AAY(ANTYODAYA ANNA YOJANA)

issue rice and wheat at the rate of Rs. 3/- per Kg. And Rs. 2/- per Kg.,
respectively to BPL families.

 The validity period for lifting of allocated foodgrains under TPDS is 50

days for each allocation month .
 Open Market Sale Scheme (OMSS), under which 30 lakh tonnes of
foodgrains have been allocated to state governments for sale to retail
consumers.
 various welfare schemes-

Mid-Day-Meal, Nutrition Programme, SC/ST/OBC Hostels, Welfare

Institutions & Hostels, Annapurna, Sampoorn Gramin Rozgar Yojna
(SGRY), National Food for Work Programme.

 Maintenance of food buffers for food

security and price stability.
 to maintain the supply of food grains throughout the year and
also to maintain the supply in the event of unforeseen
circumstances.
 to stabilize prices.
FOOD GRAIN MANAGEMENT SYSTEM IN INDIA

Price policy
• Production incentives, remunerative
prices-minimum support prices.
• Consumer protection-subsidised
ration prices

Procurement Distribution system

• Price stabilization- buffer stocks
• Supplies to consumers- fair price
• Supplying welfare programs-
operational stock
shops
 FOOD GRAIN MANAGEMENT POLICIES
IN INDIA
 The overall objective of the foodgrains management policies in India
since the mid-1960s-

(i) ensure a reasonable support price which will induce farmers to adopt
improved methods of cultivation for increasing production

(ii) ensure that consumer prices do not rise unduly.

(iii) avoid excessive price fluctuations and reduce the disparity of prices
between States.

(iv) build up sizeable buffer stocks of wheat and rice from imports and
internal procurement
POLICIES TO FACILITATE PRICE STABILIZATION PROGRAMS

 Monopoly Control Over International Trade,1965

to keep administrative control over the use of scarce foreign
currency reserves to monitor and regulate food imports.

 Restrictions on Movement of Foodgrain ,1941

preventing hoarding and building stocks for distribution in
major urban centres.

 India enforces movement restrictions in selected states on the

ground of preventing smuggling to neighbouring countries.
 Restrictions on Private Storage
a more direct and deliberate policy -under the Essential Commodities
Act 1955, which set specific limits on the level of foodgrains stock a
trader can have at any given point in time.

 Restrictions on Processing
The restrictions on sales of milled rice in India started under the Rice
Milling Industry Act 1958.
to increase procurement for government’s buffer stocking and
distribution through ration channels
 FOOD GRAIN MANAGEMENT :A
CONTINUING CHALLENGE
 Storage facility is poor-(in 2008-09) ,total= 913.23 LT of food grains were stored &
still need of additional 120 LT of storage.

 Over 11,700 tonnes of foodgrains worth Rs 6.86 crore were found "damaged" in
government godowns.

 excess stockholding by the government- foodgrain stock much higher than the
buffer stocking norm.

 Unable to maintain additional strategic buffer for key commodities for past 3 years.

 Supply chain management suffers max. Inefficiency, cumulative wastage is

estimated to be 9.8% of agriculture component of GDP.

 PDS is no longer able to stabilise prices effectively.

 The Diversification Challenge -Indian farm output has been
diversifying away from cereals and towards high value crop and
livestock products.

 Poor lifting of foodgrains by state – latest only 12%of total wheat

allocated was lifted by them under open market sale scheme

 Farmland diversion from agriculture to non-agri. use.

 Lack of uniformity of taxes on food produce in different parts of India.

 HOW TO OVECOME
 Additional storage capacity should be created.

 Modern warehouse construction- To dispose off surplus and un-storage

worthy godowns and introduce concepts of mechanized handling in
the conventional godowns

 Focus on PPP to improve effectiveness in farm sector .

 Private marketing should be strengthened through reform of the

Agricultural Produce Marketing Committees (APMC) Act.

 Farmland should not be diverted for non-agricultural use, and food

crop-cultivating land should not be diverted for non-food crops.
 TPDS- to reintroduce as universal PDS
benefit as cash assistance
flexibility in formulating alternative local food security schemes by
state govt.

 Essential Commodities Act (ECA )amendment needed for large scale

corp. Investment.

 Permitting direct purchases from farmers.- giving farmers a direct

access to markets by eliminating the middlemen wherever possible.

 Strengthening the food distribution system to reach the poor more

effectively- alternative delivery mechanisms, for example, grain
banks.
automatic and transparent policy of variable tariffs on both agricultural
imports and exports linked to the deviation of spot international prices
from their long run trends-for stabilisation of prices in an open economy.

To ensure adequate buffer for meeting requirements under TPDS &
Other Welfare Schemes.

Open market operations are vital for price stabilisation, There should
be a stable and predictable policy regarding open market sales.
THANK
YOU