The Burden Of Plenty

At Faridkot in Punjab, a disused air strip has been turned into an impromptu storage yard for foodgrain. All along it millions of bags of wheat and rice have been dumped in the open, covered only by polythene sheets. Unless the government changes its buffer stocking policy, the Food Corporation of India (FCI) will have to look for similar options to cope with this burgeoning food mountain.

The buffer stock, the key to India's food security, has been emerging as a major problem for FCI, the government's procuring and stocking agency for foodgrain. Over the past three years, good monsoons and bumper harvests have pushed India's foodgrain stocks consistently higher than the storage capacity FCI has its disposal. As on May 31, 1996, the central pool had 29.7 million tonne of foodgrain. On the same day, the total storage capacity owned or hired by FCI stood at 25.7 million tonne. Of course, this is an improvement on the 35.62 million tonne that the central pool recorded in July 1995, the highest-ever achieved.

 

FCI's problem is that it has to buy whatever is on offer and, recently, increasingly attractive procurement prices (discussed elsewhere on this page) have encouraged farmers to divert larger parts of their production to government storehouses. The situation would not have been so bad had the offtake by the states for the subsidised public distribution system (PDS) been at normal levels. This failure to distribute stocks has compounded the problems. The Economic Survey, 1995-96 notes,