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Storage woes: Thomas writes to PM on capping FCI procurement

Last Updated: Friday, June 22, 2012 - 00:53

New Delhi: Amid storage crisis, Food Minister K V Thomas has written to Prime Minister Manmohan Singh suggesting a cap on procurement of rice and wheat from farmers for the central pool as per the needs of PDS and other welfare schemes.

At present, the government is facing storage problem as its godowns are overflowing with a record 82 million tonnes of foodgrains against storing capacity of 64 million tonnes. The stocks have risen due to higher procurement following record production of rice and wheat last two years.

"I have written to the Prime Minister that it (FCI) cannot be the only agency for procurement... We must work out a mechanism to limit procurement as per our needs," Thomas told reporters.

The minister said that he had discussed the issue with Agriculture Minister Sharad Pawar.

The Food Corporation of India (FCI) buys rice and wheat at the minimum support price to ensure assured price to farmers and supplies the same at subsidised rates under the public distribution system (PDS) and other welfare schemes.

Thomas noted, "Because of increased MSP and annoucement of bonus by some states, the trend is that all foodgrains have to be procured by the FCI."

The government roughly needs 62-63 million tonnes of foodgrains to meet the demand of public distribution system (PDS) and other schemes. "This is three times higher than the buffer norm," he said.

Since inception, the FCI has been mandated to procure 25 percent of the country's total production. But at present, the grains procurement has increased to 35 percent.

This year, the FCI is targeting to buy a record 35 million tonnes of rice and 32 million tonnes of wheat.

The country is poised for an all time record harvest of rice and wheat at 103.41 million tonnes and 90.23 million tonnes, respectively, this year.


First Published: Friday, June 22, 2012 - 00:53
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