Foodgrain storage under the administrative control of the Food Corporation of India (FCI) has risen 25.6 per cent over last year to a record high, due to bumper production and excessive purchase by the government-owned procurement agency.
A recent report by the Food and Agriculture Organisation (FAO) of the United Nations forecast India’s wheat output to rise two per cent to 88.3 mt this year from 86.9 mt in 2011. Agriculture Minister, Sharad Pawar estimated production at a record 88.31 mt in the 2011-12 crop year (July-June) against 86.87 mt in the previous year.
Overall foodgrain production is estimated to rise only three per cent to 252.6 mt this year as against 244.8 mt last year, but the former would still be a record.
To overcome the deficit of covered storage space, FCI has empowered its Regional General Managers (RGMs) to hire private godowns for a year, extendable by another year.
Total grain stock in the central pool had swelled to 82.4 million tonnes as on June 1, compared to 65.6 mt in the corresponding period last year. Barring coarse grain, which forms around one per cent of overall stock, the piling up of inventory has recorded a massive jump. That of coarse grain, however, has declined 23 per cent to 90,000 tonnes, as compared to 120,000 tonnes as on June 1, 2011.
Overall procurement of wheat by FCI had surged to 34.3 mt as on June 1, a rise of eight mt from the same time last year. The norms require an FCI buffer stock of rice of 9.8 mt and a strategic reserve of two mt as on July 1. The comparative figure for wheat is 17.1 mt and three mt. The available stocks are 250 per cent higher than required under buffer norms.
During the last rabi marketing season (RMS), wheat procurement was 28.3 mt. The estimate for the current RMS was 31.8 mt but this had been surpassed by May 24. The estimated total this time is around 36 mt.
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“Procurement has hit a record high on bumper output. Due to poor offtake from states, stockpiles have been swelling,” said an FCI official.
The government had liberalised its norms to hire more private godowns under a two-year guarantee scheme, due to paucity of storage space with Central Warehousing Corporation (CWC) and the State Warehousing Corporations (SWCs). While CWC owns less than 10 mt of storage space, SWCs across all states would not have enough space to accommodate all the grains procure. FCI has been facing a storage crunch for years.
“RGMs have been empowered to hire private godowns on one-year guaranteed hiring, extendable at the same terms for another year. However, hiring under this scheme is to be resorted to after ensuring that no vacant storage capacity of CWC/SWC is available at the desired place,” said the official. “Simultaneously, efforts are on to seek long-term solutions by way of constructing our own godowns and silos under the five-year Plans. Godowns are also being got constructed under the Private Entrepreneurs Guarantee Schemes, under 7-10 years guaranteed hiring.”
As for rice, FCI has procured 16.2 per cent more (including unmilled paddy) at 32.15 mt this year as compared to 27.7 mt last year. The FCI official said all RGMs have also been delegated powers to sanction hiring rates up to a certain extent, similar to the rates offered by private bulk grain stockists.
Fresh hiring under this scheme shall remain open till March 31, 2013, and then be reviewed.