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| A food ministry-sponsored study has concluded that the foodgrain requirement of the public distribution system (PDS) and welfare schemes can be met with lower grain procurement and stockholding than at present. This would result in an annual saving in the buffer carrying cost of around Rs 6,400 crore.
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| The study has reckoned the required minimum annual procurement of rice and wheat for food security at around 16 million tonnes, comprising 9.76 million tonnes of rice and 6.28 million tonnes of wheat. The maximum procurement that might be needed is assessed at 24.7 million tonnes (14 million tonnes rice and 10.7 million tonnes wheat).
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| This level is almost half of the present level of grain purchases by the Food Corporation of India (FCI) and other public agencies under the existing open-ended procurement system. In 2001-02 (year prior to 2002 drought), these agencies had procured nearly 42 million tonnes of grains, including 21.28 million tonnes of rice and 20.63 million tonnes of wheat.
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| The study was carried out by the Agricultural Economics Research Centre of the Delhi University. Its main objective was to assess the minimum and maximum level of foodgrains buffer stock needed during the 10th plan. The findings are supposed to help the food ministry in recasting its buffer stocking policy in the current plan.
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| The study has suggested that the Food Corporation India (FCI)could rely entirely on domestic procurement for building annual buffer stock of 16 million tonnes for the PDS and welfare schemes like Sampoorna Grameen Rozgar Yojana (rural employment scheme) and the mid-day meal scheme.
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| So far as the seasonal variations in the foodgrain availability and prices are grains, these could be taken care of partly through domestic procurement and partly through imports.
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| If India has to open up its domestic market under the World Trade Organisation stipulation of 3 per cent de minimus market access, it could go in for imports of 2 million tonnes of rice and 1.6 million tonnes of wheat in a year, the study report has said.
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| It has estimated that the minimum grain stock holding needs to be only 9 million tonnes (6.5 million tonnes rice and 2.57 million tonnes wheat) in April-June quarter and 12.65 million tonnes (5.37 million tonnes rice and 12.65 million tonnes wheat) in July-September quarter during the 10th plan.
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| This is far lower than the minimum stocking norms in vogue at present which require the Central grain pool to hold at least 24.3 million tonnes (10 million tonnes rice and 14.3 million tonnes wheat) on July 1 and 18.1 million tonnes (6.5 million tonnes rice and 11.6 million tonnes wheat) on October 1.
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| The reduced inventories would result in substantial saving on the buffer carrying cost, estimated in the 2002-03 budget at Rs 8,066 crore at the rate of Rs 2,631 per tonne.
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| The lower level of procurement and stock holding will help bring this down to between Rs 1640 crores (with minimum stock) and Rs 3223 crores (at maximum stock). |
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