The state's role should be confined to keeping the bare minimum level of buffer stock, purely from the viewpoint of food security
A World Bank report on India's food management has criticised the procurement, distribution and buffer stocking policies because of their ever-increasing fiscal costs imposed by direct subsidies and inefficiencies in handling operations. As a result of these policies, the private trade's role in grain marketing, storage and distribution has been severely curtailed as it has virtually been forced to operate only the residual market after the Food Corporation of India (FCI) and other public agencies have mopped up the bulk of the stocks.
The inefficiencies of the public grains handling agencies burden grain growers, traders and consumers with costs that a smoother, more modern operation would not incur. Present policies also do little to attract private investment in post-harvest handling, including processing of foodgrains.
Nearly 30 per cent of paddy is still milled in hullers and shellers using less efficient technologies with rice recovery rates of 50 to 68 per cent compared to modern rice mills' 70 to 72 per cent. Wheat milling is also dominated by less efficient chakkis that handle about 85 per cent of the total wheat. The remaining wheat is processed in roller flour mills whose extraction rates (60 to 65 per cent) are significantly below international norms (72 to 75 per cent).
The Reserve Bank of India has also in a way expressed its disq
