Public good, private profiteering

Even as debates range about the Food Security Act, a battle is escalating between the Food Corporation of India (FCI), the government’s rice and wheat procurer, and the government of Punjab, India’s major wheat-growing state. The FCI recently cut its 10-year guaranteed storage capacity allocation in Punjab to less than 500,000 tonnes from 15 million tonnes. This has angered the state government, which had seen the plan as an opportunity for a larger private sector role in warehousing. Punjab’s Agriculture Minister Sucha Singh Langa has been vocal in criticising FCI. On the sidelines of a conference in Mumbai, FCI Chairman Siraj Hussain responded by saying that Langa could say whatever he wanted but FCI’s cutbacks were driven by private rental demands in Punjab, which were Rs 6.11 per quintal a month against Rs 5 per quintal elsewhere.