FCI to stop Haryana wheat buying

From April, state agencies to take over; Punjab willing to do likewise in due course; however, Paswan says nationwide cash transfer in PDS is problematic

Food Corporation of India (FCI) will stop its annual wheat procurement in Haryana from the coming crop season that starts from April 1. It will, instead, hand over the entire process to the state government.

In neighbouring Punjab, it is expected to stop operations from the 2016-17 crop marketing season.  

In both the states, which together contribute a little more than 80 per cent of wheat and rice to the central pool, FCI on its own purchases 10-12 per cent. The rest is already handled by state agencies.

The Shanta Kumar panel on reforming FCI had recommended the Corporation shift its grain procurement from Punjab and Haryana to the eastern  states where the process is poor.

“Haryana has agreed to handle the entire wheat procurement from the coming season. In the case of Punjab, they have sought more time,” Food Minister Ram Vilas Paswan told reporters on Thursday.  

He also said the department of food was preparing to launch a programme for transfer of food subsidy in cash on an experimental basis in Chandigarh and Puducherry. However, the panel's recommendation to cover the entire country would be difficult.

“If we move entirely to a system of cash in lieu of grain as suggested by the committee, what will happen to the procurement process which supports the farmers, what will be fate of the millions of tonnes of godowns we have created? All these issues need to be addressed before we scale up the cash transfer of food subsidy,” Paswan said.

In 2014-15, of the 6.49 million tonnes of wheat purchased in Haryana, FCI procured around 12 per cent. The rest was done by the state agencies. Of the total paddy procured, of around 2.4 mt, only around 13,000 tonnes was done by FCI. In Punjab, in 2014-15, of the total wheat purchase of 12.09 mt, FCI on its own purchased 0.46 mt. The rest was by state agencies. Similarly, of the total 11.64 mt of paddy purchased from Punjab, only 1.83 mt was by FCI. State agencies did the rest, on behalf of FCI.

On another recommendation of the Shanta Kumar committee, for a uniform tax structure on foodgrain in all states, Paswan said only West Bengal and Uttar Pradesh had expressed willingness. The other states had declined.

“On another issue, of involving private players in quality control operations of FCI, we have already been implementing it on a pilot basis in 25 godowns in Chhattisgarh,” Paswan said.

On outsourcing of FCI godowns to private entities, the minister said even before the committee sent its recommendations, the department was implementing it on a limited scale. He said the department was also in the process of replacing covered area plinth storage.