With foodgrain piling up in warehouses, Food Corporation of India (FCI) has estimated that offtake (lifting of stocks) should increase by at least 25 per cent to 60 million tonnes (mt) to ensure smooth operations this year.
“The offtake has to rise so that space is created for the new arrivals. We have informed the ministry and are working on how to increase the off take in states like Punjab, Haryana and Andhra Pradesh,” said an official, requesting anonymity.
The level of offtake suggested by FCI is close to agriculture minister Sharad Pawar’s initial estimates that the government will need to procure and distribute 62 mt of foodgrains annually if the National Advisory Council's (NAC) recommendations on the proposed Food Security Act are accepted.
Given the level of procurement in the ongoing kharif marketing season, FCI believes the major producing states of Punjab, Haryana and Andhra Pradesh are likely to face further problems from January 2011.
Initial estimates show Punjab and Andhra Pradesh are likely to face a storage crunch of at least 300,000 tonnes by February. Haryana will be short of at least 70,000 tonnes of storage space by January.
Officials said FCI was working closely with the ministries of food and agriculture to overcome the infrastructural hurdles to increasing the offtake.
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Till October 15, rice procurement in kharif season 2010-11 by all government agencies was of the order of 2.8 mt, of which 2.3 mt was in Punjab, followed by Haryana, Tamil Nadu and Kerala. The contribution of Haryana was a little over 0.5 mt, and of Tamil Nadu, about 26,000 tonnes. Kerala has contributed 16,000 tonnes.
FCI’s estimate come in the backdrop of the agency and the government facing heavy criticism from various quarters on its procurement policy and lack of storage facilities, which had resulted in 50,000 mt of wheat being declared “unfit for human consumption” recently. The Supreme Court had noted the case of inadequate storage facility and had asked the government to distribute excess stocks to poor people, free of cost. Consequently, government had increased allocations for families below the poverty line and those covered under the Antyodaya Anna Yojna.
“It is true, we want to be better prepared this year. We are working on it,” said an agriculture ministry official, on condition of anonymity.
However, increasing the offtake won’t be easy. The public distribution system has various bottlenecks. Most states complain of lack of infrastructure or funds to facilitate increased offtake. More, open market schemes have also received lukewarm response from retail buyers, adding to the difficulties of the government.