Viability challenge before foodgrain agencies

National foodgrain management agencies should strive to become commercially self-supporting by investing in infrastructure and diversifying into processing and value-addition.

The agencies should look at collaborations with private sector enterprises to improve efficiency and reduce costs, speakers said at the five-day regional seminar on challenges before the national food agencies in the new millennium that concluded here today.

Organised jointly by Food Corporation of India and Central Warehousing Corporation under aegis of the Association of Food and Agricultural Marketing Agencies in Asia and the Pacific (AFMA), the seminar was attended by representatives of food agencies of nine countries.

Delegates felt foodgrain management agencies should explore ways of getting into production and marketing of processed and value-added foods, wither on their own or through private sector partnerships.

To become profitable, the agencies could market surplus stocks under their own brandname or invest in infrastructure like setting up of markets with backward and forward linkages.

This would help them cross-subsidise social obligation projects from commercial operations. Foodgrain management agencies in Indonesia had already started doing this, speakers said.

The agencies could train farmers in market-driven production, processing and marketing.

They could induct private sector partners in procurement, handling, storage and distribution of food and agricultural commodities.

This model had proved successful in many countries. Sri Lanka had successfully developed a mechanism to provide direct cash food subsidy to the poor through a stamp card system, a speaker pointed out.

At the same time, speakers felt the agencies should retain their core focus of preventing fluctuations in the price of food items in the domestic market, caused by volatility in international markets. National food agencies were responsible for stability in domestic prices.