08 Apr

Food Grain Storage Issues

< General Studies Home Page

Contents

• Food Grain Storage Issues
  1. Important Schemes
     A) World’s Largest Agri-Storage Plan (Feb 2024)
     B) Private Entrepreneurship Guarantee (PEG) Scheme
• Food Security
  1. National Food Security Act, 2013
• Public Distribution System and Associated Issues
  1. One Nation One Ration Card (ONORC)

---

1) FOOD GRAIN STORAGE ISSUES

• The Food Corporation of India is the main agency for procurement, storage and distribution of food grains.
• The requirement of Storage Capacity in Food Corporation of India (FCI) depends upon the level of procurement, requirement of buffer norms, and Public Distribution System (PDS) operations for rice and wheat mainly.
• Objectives:
  » Feed TPDS and other welfare schemes.
  » Ensure food security during production shortfalls.
  » Stabilize prize.
• FCI continuously assesses and monitors the storage capacity and based on the storage gap assessment, storage capacity is created/hired through following schemes:
  1. Hiring of godowns from Central Warehousing Corporation (CWC)/ State Warehousing Corporation (SWCs)/ State agencies.
  2. Hiring of godowns through Private Warehousing Scheme (PWS)
  3. Central Sector Scheme (CSS):
     • Government is implementing a central sector scheme for construction of godowns with focus on augmenting storage capacity in the States of the NE region and a few other states.
  4. Construction of SILOs under PPP mode
  5. Private Entrepreneurship Guarantee (PEG) Scheme
• This is used for storage of food grains procured for central pool by the government agencies.
• Current Storage Capacity (Feb 2024)
  • As per the latest data (Feb 2024), the total storage capacity with FCI is 361.62 lakh tonnes. Of this 146.86 lakh tones is owned by FCI and remaining 214.76 lakh tonnes is hired.
  • The storage capacity with state government agencies is another 400.74 lakh tonnes.
  • Together it adds up to 762.36 lakh tonnes. (76 million tonnes)
  • In addition, a capacity of around 15 million tonnes have been created by Private Entrepreneurs Guarantee Scheme.

1) IMPORTANT SCHEMES

A) WORLD’S LARGEST AGRI-STORAGE PLAN (FEB 2024)

• Need of such initiative:
  • Low food grain storage capacity in India: Currently India has a storage capacity of 47% of its total food grains production. In states like UP and Bihar this storage capacity is below 50%. But other countries like China, USA, Brazil, Russia, Argentina, Ukraine, France etc have storage capacity higher than the food grain production.
  • Multiple agencies involved in food grain management including the Food Corporation of India (FCI), Central Warehouse Corporation, Warehouse Development Regulatory Authority, Railways, and the civil supply departments of states.
• In Feb 2024, PM Modi has announced a plan to set up the “World’s largest grain storage plan in the cooperative sector“.
  • Pilot project is being undertaken in 11 Primary Agriculture Credit Societies (PACS) in 11 states.
    • What will an integrated facility look like?
      • The facility built at a cost of Rs 2.25 crore. The integrated modular PACs will have a custom hiring centre, a multi-purpose hall procurement centers, primary processing units for cleaning and winnowing – a storage shed, and container storage and silos.
  • Eventually the aim is to cover more PACs.
    What are PACS?
    Primary Agricultural Credit Societies (PACS) are grassroots-level institutions and their membership encompasses individual farmers, artisans, and members of other weaker sections of the society as shareholders. They form the lowest tier of the federated short-term cooperative credit structure with District Cooperative Banks (DCCBs) and/or State Cooperative Banks (StCBs) in their upper tiers.
    They are involved in short term lending – or what is known as crop loans.
• What is the plan expected to do?
  » Set up storage infrastructure of 70 million tonnes over the next five years at a cost of Rs 1.25 lakh crore.
  • The scheme will work on Hub and Spoke model.
    • Of the 63,000 PACS across the country, 55,767 will function as spoke and will have a grain storage capacity of 1,000 metric tonnes each, while the remaining 7,233 PACS, which will function as hubs, will have a storage capacity of 2,000 metric tonnes each. Thus, all the 63,000 PACs will have a combined grain storage capacity of 70 million tonnes.
  • This will enable farmers to store their produce and sell it at the right time and right price. These efforts should reduce post harvest losses; bring down food grain handling and transportation costs;
    » This will also enable farmers to get loan from banks.
    » The scheme will also enable PACS to undertake various other activities like Functioning as Procurement centres for State Agencies/ Food Corporation of India (FCI); Serving as Fair Price Shops (FPS); Setting up custom hiring centers; Setting up common processing units, including assaying, sorting, grading units for agricultural produce, etc.
• Note: Earlier in June 2023, the Union Cabinet has approved he constitution of an Inter-Ministerial Committee (IMC) to facilitate the world’s largest grain storage plan in the cooperative sector. It was chaired by Amit Shah. The IMC modified guidelines/ implementation methodologies of the schemes of respective ministries.
• Budgetary Allocation: The plan doesn’t have a separate allocation; it will be implemented by the convergence of 8 Schemes:
  • 4 schemes under MoA&FW: Agriculture Infrastructure Fund (AIF), Agricultural Marketing Infrastructure Scheme (AMI), Mission for Integrated Development of Horticulture (MIDH), and Sub Mission on Agricultural Mechanisation (SMAM)
  • 2 Schemes under Ministry of Food Processing Industries: Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PMFME), and Pradhan Mantri Kisan Sampada Yojana (PMKSY).
  • 2 Schemes under Ministry of Consumer Affairs, Food and Public Distribution: Allocation of food grains under the National Food Security Act, and Procurement operations at MSP.

B) PRIVATE ENTREPRENEURSHIP GUARANTEE (PEG) SCHEME

• Launched in 2008
• Aims: Augmenting the covered storage capacity in the country.
• Details:
  • Under the scheme godowns are constructed in PPP mode and the land and construction cost is borne by selected partners.
  • FCI on its part guarantees 10 year usage of storage capacities to the private investors and 9 years to CWC and SWCs.
  • Locations for construction of godowns are identified by FCI on the basis of recommendations of state level committees to cover the gaps in the storage.

2) FOOD SECURITY

• What is Food Security?
  • As per the Committee on World Food Security, the food security exists when all people, at all times, have physical, social and economic access to sufficient, safe, and nutritious food that meets their dietary needs and food preferences for an active and healthy life.
  • The Four Pillars of food security are availability, access, utilization, and stability (both price and supply).
• Key Initiatives to Promote Food Security in India:
  • National Food Security Act, 2013: It seeks to provide subsidized food grains to approximately 2/3rd of India’s population.
    • Other than this, Mid-Day Meal Scheme, Integrated Child Development Program, and the PDS system are focused on ensuring nutritional security.
  • Various initiatives at state level include:
    • ‘Indira Canteen‘ initiative by the state of Karnataka, which serves breakfast, lunch and dinner at very low prices.
    • ‘Amma Unavagam‘ (Mother’s Canteen) is an initiative by TN.
  • Government also takes several initiatives to control food inflation:
    • Maintaining Buffer stocks
    • Controlling Exports in case of scarcity
    • Using MSP mechanism to encourage farmers to grow crops which are in shortage.

1) NATIONAL FOOD SECURITY ACT, 2013

• Introduction:
  • The NFSA, 2013 seeks to provide for food and nutritional security in human lifecycle approach, by ensuring adequate quantity and quality of food at affordable prices to people to live a life with dignity and for matters connected therewith and incidental thereto.
• Salient Features of the Act are:
  • It gives legal entitlement to 75% rural and 50% of the urban population ( which come to 2/3rd of country’s population) for subsidized grains under TPDS.
  • It moves from ‘household food entitlement’ to ‘individual food entitlement‘. Every individual is entitled to 5 kg of rice, wheat, or coarse cereals a month at Rs 3, Rs 2 and Rs 1 per kg. The beneficiary is identified by the state government based on the parameters decided by centre.
  • The entitlement for Antyodaya Anna Yojna (AAY) will remain at Rs 35 kg per household.
  • For pregnant and lactating mothers, the act provides for free meal at the local anganwadi (during pregnancy and upto six months after child birth) as well as maternity benefits of Rs 6,000 in instalments.
  • For Children:
    • Below 6 months: ‘Exclusive breast feeding shall be promoted.
    • Six month to six years: The age guarantees an age appropriate meal, free of charge, through the local anganwadis.
    • Six years to 14 years: One free mid-day meal, shall be provided everyday (except on school holidays) in all school run by local bodies, government and government aided schools, upto Class VIII.
  • The act also provides for the Creation of State Food Commissions which will monitor and evaluate the implementation of the act, give advice to state governments and will enquire into violations of entitlement.
  • Food Security Allowance in case of non-supply of the entitled quantities of foodgrains or meals to entitled persons under the act.
  • Schedule 3 of the act also lists various provisions for advancing food security, under three broad categories:
    • Revitalization of Agriculture; reforming procurement, storage and movement; other provisions like drinking water, sanitation, health care, adequate pensions for senior citizens, persons with disability and single women.
• Progress:
  • NFSA has been implemented in all 36 states/Uts covering more than 80 crore persons.
  • Direct Benefit Transfer: In Chandigarh, Puducherry, and Urban areas of Dadra and Nagar Haveli, the act is being implemented in the cash transfer mode.
• How has it contributed in reducing Hunger:
  • Increased food availability for weaker section. It is visible in increased government food subsidy burden.
  • By taking a lifecycle approach, it has ensured the right from the time women get pregnant to the death of a person, if the person is vulnerable, she would get food security support.
  • With improved used of technology, like Aadhar based authentication, leakage has reduced.
  • One Nation One Ration Card (ONORC) will also ensure that migrants are able to enjoy the benefits of NFSA.
• Challenges:
  • Fiscal Burden; Leakages and Siphoning; Identification of Beneficiaries issues; Infrastructural issues; Aadhar Related Issues; Social and Cultural Factors;

3) PUBLIC DISTRIBUTION SYSTEM AND ASSOCIATED ISSUES

• Introduction
  • The Public distribution system (PDS) evolved as a system of management of scarcity and for distribution of food grains at affordable prices. Over the years, PDS has become an important part of Government’s policy for management of food economy in the country.
  • Note: PDS is supplemental in nature
  • Responsibility: PDS is operated under the joint responsibility of the Central and the State Government.
    • Central Government, through Food Corporation of India (FCI), has assumed the responsibility of procurement, storage, transportation and bulk allocation of food grains to the state governments.
    • State government own the operational responsibilities including allocation within state, identification of eligible families, issue of Ration Cards and supervision of the functioning of the fair price shops (FPSs).
  • Commodities:
    • Under the PDS, presently the commodities namely wheat, rice, sugar and Kerosene are being allocated to the States and UTs for distribution.
    • State governments also distribute additional items of mass consumption through the PDS outlets such as pulses, edible oils, iodized salts, spices etc.
  • Evolution of PDS
    • Emanated in critical food shortages of 1960s. Initially began with focus on urban scarcity area. It contributed to containment of price rise and ensured access to food grain to urban consumers.
    • With increase in food production, primarily due to green revolution, the outreach of PDS was extended to tribal blocks and high poverty incidence areas in 1970s and 1980s.
    • Till 1992, it remained a general entitlement.
    • In 1992, Revamped PDS was launched in 1775 blocks throughout the country – where a substantial number of poor lived.
    • Targeted PDS (TPDS) was started in 1997 with focus on the poor.
      • Three core TPDS categories: Under the TPDS, households are classified in accordance with a set of socio-economic parameters and provided with a ration card on this basis. Across India, the three core PDS card categories are above poverty line (APL), below poverty line (BPL) and Antyodaya (poorest of the poor) (AAY was started in 2000).
    • Antyodaya Anna Yojana (AAY)
      • In order to take TPDS more focused and targeted this category of population, the AAY was launched in December 2000 for 1 crore poorest of the poor families among the number of BPL families covered under TPDS within the states and providing them food grains at highly subsidized rate of Rs 2 per Kg for wheat, Rs3 per Kg for rice. The states/UTs are required to bear the distribution cost, including margin to dealers and retailers as well as the transportation cost.
      • The scale of issue was initially 25 Kg per family per month and was increased to 35 Kg per family per month with effect from April 1 2002.
    • TPDS under National Food Security Act, 2013
      • NFSA, 2013 was notified on 10th Sep 2013.
      • It covers 2/3rd of the entire population (75% of rural population and 50% of the urban population) under two categories of beneficiaries: 1) Antyodaya Anna Yojana (AAY) and 2) Priority Households (PHH).
      • Under the NFSA, 2013, the priority households are entitled to receive food grains @5 Kg per person per month at the issue price of Rs. 3.00, Rs. 2.00 and Rs. 1.00 per Kg for rice, wheat and coarse grains respectively. The existing AAY households, however, continue to receive 35 Kg of food grains per household per month.
  • Pradhan Mantri Garib Kalyan Anna Yojna
    • A Part of Atmanirbhar Bharat Abhiyan.
    • It was launched to provide additional allocation of foodgrains from the Central Pool at the rate of 5 kg per person per month free of cost for all the beneficiaries covered under TPDS (AYY & PHH) including those covered under DBT for a period of 3 months i.e. April – June 2020.
    • It has continued to be extended since then.
    • In Nov 2023, the government has declared the extension of PMGKAY for an
      additional five years till 2028. The implementation of this extension began from 1st Jan 2024.
• Key Challenges faced by the PDS system
  1. Corruption and Leakage; Inaccurate targeting of beneficiaries; Heavy losses in storage and transportation; Later and Irregular arrival of grains in fair price shops; WTO’s Agreement on Agriculture; Nutritional challenges due to lack of focus on food diversity; Digitization of PDS
• REVAMPING PDS
  • Steps being Taken.
    • Decentralization of Procurement Process
    • Integrated Management of Public Distribution System – (IM-PDS): Integrate PDS system/portals of states/UTs with Central Systems/portals with and aim to introduction of national portability, and de-duplication of ration cards/beneficiary etc.
    • One Nation One Ration Card (ONORC) – To ensure that even migrant workers are able to enjoy the benefit of Public Distribution system.

1) ONE NATION ONE RATION CARD (ONORC)

• What is a Ration Card?
  • PDS families are issued Ration Cards to access this benefit. Currently, around 23 crore ration cards have been issued in all states and UTs.
  • Before the ONORC system, a ration card could be used to access subsidized grains from the fair price shop assigned in the locality. A migrant was not able to access subsidized grains in new locality.
• One Nation, One Ration Card (ONORC)
  • ONORC is being implemented under NFSA, 2013. it allows beneficiary to buy subsidized food grains from any FPS shop in the country, by using the same ration card after biometric/Aadhar authentication on electronic Point of Sale (ePOS) devices.
• How does ONORC work?
  • Integrated Management of Public Distribution System (IM-PDS) portal, provide the technical platform for the inter-state portability of ration cards.
  • Biometric authentication on ePOS devices enable beneficiary to purchase the entitled food grains under the NFSA.
  • Annavitran.nic.in hosts the data of distribution of foodgrains through E-PoS devices within a state.
    • It allows availing of PDS benefit outside the district but within the home state.
  • Standard Format of ration cards which ensures an unique ID of each customer.
• How much foodgrains cane be procured?
  • Only the migrants’ entitlement, the rest of the grains would be procured by the family back home.
• Steps being taken
  • Seeding of Ration Cards with Aadhaar numbers, Installation of ePOS devices at all FPS
  • Once 100% target of both these are reached, the all-India portability of ration cards will become a reality.
• Needs/Advantages of One Ration Card
  • Right to Food: Enable migrant families to access PDS benefits from any Fair Price Shop in the country.
  • End Discrimination and Improve the quality of service
  • Aadhaar seeding would also weed out duplicate ration cards
  • It could be highly crucial for emergencies like the COVID-19 crisis.