FCI storage capacity declines 9% in 7 yrs

At a time when the government is aggressively promoting the need to increase warehousing facilities to ensure foodgrain do not rot in open places, Food Corporation of India (FCI)-administered storage capacity has declined over nine per cent in the last seven years.

The total storage capacity by the FCI fell from 31.73 million tonnes in 2003 to 28.84 million tonnes in 2010. Of this, 25.86 million tonnes is stored in warehouses, while the remaining 2.98 million tonnes is stored under cover and plinth. The problem with open storage facilities, where foodgrain is stored under cover and plinth, is when there is excessive rainfall or other adverse climatic conditions, the fear of spoilage increases.The government has reasons to worry as nearly one lakh tonnes of foodgrain stored under cover and plinth were spoilt due to flood following incessant rainfall. The Supreme Court had condemned the government following reports of rotting foodgrain, while scores of poor people went hungry across the country.

 

“Procurement was very low, hovering below 100 million tonnes in early years of this decade, and therefore, warehousing space under FCI was lying vacant. Forthwith, the Food Ministry sought reports from the Comptroller and Auditor General (CAG), the government’s audit firm, and McKinsey, renowned global consultancy firm. The two firms suggested that FCI should do away with the rented storage facilities in a phased manner. The decline in FCI’s warehousing capacity is in line with that move,” said a senior FCI official.

The unoccupied capacity owned by FCI was rented out to private players across states to help reduce the management cost. Now, looking at the increase in procurement of foodgrain in the last three years, we have started re-building storage capacity in co-operation with private players, he added.

FCI has added nearly 17 million tonnes of capacity with various state warehousing corporations. It has also successfully added nearly five million tonnes warehousing space on its own. Most importantly, the agency has successfully encouraged private investors to build another 15.5 million tonnes of storage facility under the 10-year guarantee scheme to take the storage area up to over 60 million tonnes. This additional storage space by private investors is expected to be ready by the next financial year.
 

SPACE PAIN Storage capacity (million tonnes)
Capacity	2003	2004	2005	2006	2007	2008	2009	2010
Covered
Owned	12.82	12.82	12.91	12.93	12.94	12.95	12.97	12.97
Hired	13.77	10.85	10.46	9.90	9.34	8.71	10.12	12.89
Total	26.59	23.67	23.37	22.83	22.28	21.66	23.09	25.86
CAP (cover and plinth)
Owned	2.26	2.21	2.25	2.21	2.29	2.20	2.17	2.51
Hired	2.88	1.36	0.41	0.51	0.63	0.03	0.02	0.47
Total	5.14	3.57	2.66	2.72	2.92	2.23	2.19	2.98
Grand Total	31.73	27.24	26.03	25.55	25.20	23.89	25.28	28.84

Procurement of foodgrain by the government agency have significantly gone up over the years. FCI procured 230 million tonnes this year, against 253 million tonnes in the previous year. In 2008, FCI’s procurement surpassed the 200 million tonnes mark for the first time. Next year, too, the procurement is likely to remain high.