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Loss of foodgrains, poor back-end infra are major challenges

Rs 236 crore worth of foodgrains lost in Q1

Somesh Jha  |  New Delhi 

The ambitious was passed in the on Monday but experts said there are challenges which the government has to tackle to make it a success. One of these is to deal with the loss of the government incurs every year.

According to the latest estimates, worth Rs 236.32 crore were lost due to storage, pilferage, transportation and damage in the first quarter of 2013-14. By the first quarter, the loss constituted almost half of worth Rs 489.13 crore lost in 2012-13.

The non-issuable (not fit for human consumption) foodgrains in the first quarter of this year were worth Rs 9.85 crore, the highest for the past many years. In 2012-13, foodgrains worth Rs 2.58 crore were reported damaged. Hence, there was an almost four-fold rise in non-issuable foodgrains in the first quarter of 2013-14, compared to the entire 2012-13. The loss in volume terms was 8,881 tonnes of foodgrains in April-June of 2013-14.

The loss of foodgrains during storage was 0.37 per cent of the total quantity received at depots in the first quarter of 2013-14 against 0.27 per cent in the entire 2012-13.

The proportionate loss during transportation in first quarter of this year was also increasing, as 0.55 per cent of the total foodgrains were lost during transit, which accounted for Rs 106.18 crore. In 2012-13, this figure stood at 0.52 per cent.

In fact, both, the proportion of loss during storage and transit has been increasing. The storage loss rose from 0.21 per cent in 2010-11 to 0.23 per cent in 2011-12 and transportation loss increased from 0.47 per cent in 2010-11 to 0.48 per cent in 2011-12. An official said that the reason behind such losses is thefts, loss of moisture, pest infestation, exposure to rains, negligence on part of concerned persons in taking precautionary measures, etc.

The total loss of foodgrains, as a result, in the last three years and in the first quarter of the current financial year accounted for Rs 2,030.90 crore.

Experts believe the government needs to strengthen back-end before implementing the food security law in the country.

“As food security is implemented, there would be some pressure for the creation of additional demand of foodgrains,” said Madan Sabnavis, chief economist, CARE ratings.

Hence, back-end needs to be taken care of and the initiative should be taken by government itself because it is a government-oriented scheme and building of warehouses by the private sector would be limited to commercial interests only, he added.

“There should be structures built where we are able to procure, store and distribute them with minimum leakages,” Sabnavis said.

As the procurement of foodgrains increase, the storage capacity should be appropriate, explained Sabnavis, “If we look at the bill closely, 60 million tones would be distributed annually, on an average five million a month. This means 55 million tonnes would be lying in the warehouses and if we add buffer stock to it, we would move closer to 100 million tonnes of capacity. Hence, we would require appropriate mechanisms for storage.”

Ashok Gulati, chairman of the Commission for Agricultural Costs and Prices, told Business Standard it was a debatable issue as to how much foodgrains were damaged.

“Twelve million tonnes in Punjab and five-six million tonnes foodgrains in Haryana are lying in the open. The International Mechanical Engineers estimates say that every year 21 million tones of wheat is damaged in India. Hence, that goes without saying that we need better to take care of our produce", said Gulati.

The total storage capacity available for central pool stocks was 74.6 million tons as on July 30 this year. However, Gulati believed that unless it is announced what the buffer stocks norms in the Bill are, one cannot know how much produce needs to be stocked. He felt that not more than 51-52 million tones storage capacity will be required for implementing the proposed scheme. "This is because we need to match our procurement with distribution and at present, we are keeping much larger stocks than we need", added Gulati.

First Published: Wed, August 28 2013. 00:49 IST