FCI panel for optimum utilisation of facilities with private help

At present, FCI owns around 10 silos, each with a capacity of 5,000-10,000 tonnes

A high-powered committee constituted by the government to reform the Food Corporation of India (FCI) is expected to recommend optimum utilisation of available land, storage space, silos and other facilities with the active participation of private players.

According to officials, the committee, which is likely to give its final report to Prime Minister Narendra Modi on Wednesday, might also suggest outsourcing the silos currently under the supervision of FCI to private companies.

At present, FCI owns around 10 silos each having a capacity of 5,000-10,000 tonnes. However, a few of them such as the one near Mayapuri in Delhi have been lying unused for the past several years. “The committee is expected to favour full utlisation of facilities with the help of the private sector,” said a senior official.

On the question of trifurcating the FCI into three separate entities - one dealing with procurement, the second with storage, and the third with transportation — officials said the committee might not favour a clear division on the lines of un-bundling of State Electricity Boards.

The FCI might also be allowed outsource foodgrains procurement to private parties.

“There is a notion that already, FCI procures less than 20 per cent of the total foodgrains stored by it, while the rest is done by state agencies. If this is also outsourced to private agencies, it will only help in further lowering the financial burden,” said the senior official cited above.

He pointed out that the FCI rules and bylaws allowed such an outsourcing and cooperatives and self-help groups were already procuring grains on behalf of FCI in some places, though in small quantities.

“Therefore, there would not be a big need to alter the structure,” the official noted. The panel might also recommend that the corporation limit its foodgrain procurement only up to the cap mandated by the buffer stock norms.

Currently, grain procurement is done by the FCI either itself or by the state agencies on its behalf. Same with storage and transportation.

Of the 70-million tonnes of foodgrain purchased by FCI annually from farmers, only 10-20 per cent is directly done by it, with the rest being purchased by states agencies on behalf of FCI.

However, the employees’ union in FCI has threatened to stage a nationwide agitation if the government decides to hand over the facilities to private players without proper evaluation.

They also alleged some big private logistics companies have already started sending their representatives to FCI facilities near Bengaluru in anticipation of a favourable report.

“By outsourcing silos or other facilities to private companies or allowing them to use FCI land, the Corporation would be bleeding further, as it will only collect rental charges, while other benefits will go to the private company,” said J S Duggal, president, Bhartiya Khadya Nigam Karamchari Sangh, one of the employees union in FCI.