We have tonnes of foodgrains rotting in open, improperly covered stocks lying all over the place, with poor to horrible weather conditions, which are further subject to pilferage and offering a feast to the growing quantum of rodent population in the country

Almost 40 years ago, the Food Corporation of India (FCI) was established under the Food Corporation Act (FC Act) of 1964, and it came into being in Thanjavur, Tamil Nadu, in 1965. According to the FC Act, the main objectives of setting up this corporation were to ensure price support operations for safeguarding the farmers interest; help in distribution of foodgrains through public distribution system (PDS); maintain a satisfactory level of buffer stocks to ensure national food security; and to regulate the price to ensure supply of foodgrains to consumers at a reliable price.

The FCI takes the directives both from the Ministry of Food and Agriculture and implements the policies dictated by them. Its annual subsidy is now in excess of $10 billion. It has no role in deciding the minimum support price (MSP), or in deciding on import or export of foodgrains. Its main responsibility covers two staple foodgrains, viz, wheat and rice.

A look at the FCI website (http://fciweb.nic.in/) gives a lot of details, but it is pertinent to note, just the following basic on how it has fared so far:

Storage capacity of foodgrain in the country in million tonnes (MT)

A close scrutiny of the table will show that, in spite of the backing of the government, FCI has made very little progress in "owning" its own godowns as they "progressed" from owning covered space of 12.91 MT in 2005 to just 13.03 MT in 2013 — after eight years! It has shown neither interest nor enthusiasm in taking the lead and responsibility in acquiring the land and constructing the warehouses to suit its needs. Whereas, it has "hired" space to keep 10.46 MT of foodgrains in 2005 and it has doubled the same to keep 20.99 MT in 2013.

Why did FCI decide to hire, instead of "owning" the space? The space could have been easily obtained and built to meet its needs. This needs to be investigated by a proper authority.

A further study reveals that the Private Warehousing Scheme was proposed only in 2010, with variable rentals that would be Rs4.16/quintal/month to a maximum of Rs5.21/quintal/month, and this would be applicable till 31st March 2013! Its plans for fresh hiring of godowns, presumably at a higher level than these, have not been announced so far.

In the meantime, we have tonnes of foodgrains rotting in open, improperly covered stocks lying all over the place, with poor to horrible weather conditions, which are further subject to pilferage and offering a feast to the growing quantum of rodent population in the country.

In fact, as of January 2013, 10.68 million tonnes of foodgrains have been found to be damaged/rotting etc in FCI godowns, enough to feed 600,000 people for 10 years. These figures are not accurate, but only an estimate, and can be much higher. FCI has enough storage space for keeping foodgrains covered, and yet, for reasons unknown, these have been found to be stored in open yards in many places, exposed to bad weather conditions.

In a recent press conference, attended by Jairam Ramesh, union rural development

minister and KV Thomas, the minister of state for consumer affairs, food and

public distribution), stated that the government proposes to spend Rs450 crores in building intermediate godowns at various block levels to facilitate efficient and smooth distribution of foodgrains through PDS, and to eliminate the scope for leakages. There has been an outcry that with the help of miscreants, foodgrains meant for distribution through PDS have found the way to the open market at the cost of aam aadmi. These smaller versions of godowns will be able to store 3,400 tonnes of foodgrains for three months emergency requirement. In this proposal, the state goverments are to provide the necessary landspace to construct the godowns while the Centre will bear the rest.

A bold step would be for the government to make an open offer for business houses to set up the most modern warehousing facilities. This will be on land to be provided by the government, on a long lease, say upto 30 years. The government may be allowed to charge a nominal interest. This will take the burden off the government, with the state providing the basic facilities in suitable locations. Such godowns need not necessarily cover just the foodgrains alone, but permission may also be granted to include other agricultural produce. This step will help in reducing the hold of middlemen in this area as well.

All these ideas are nice to hear and discuss, but what needs to be done is for the government to act speedily and bring about transparent procedures to be followed in such cases.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)