Food Corporation of India

Why in news?

• Suggesting a five-point reform agenda for the Food Corporation of India, Union Food Minister said that the FCI’s public perception needs to be changed from “being inefficient & corrupt to dynamic, inclusive & honest.”

About Food Corporation of India:

• The Food Corporation of India was setup under the Food Corporation's Act 1964 , in order to fulfill following objectives:
  • Effective price support operations for safeguarding the interests of the farmers.
  • Distribution of foodgrains throughout the country for public distribution system.
  • Maintaining satisfactory level of operational and buffer stocks of foodgrains to ensure National Food Security
• Simultaneously, Commission for Agricultural Costs and Prices (CACP) was created in 1965 to recommend remunerative prices to farmers.

Functions of FCI:

• Procurement:
  • Government extends price support for procurement of wheat, paddy and coarse grains through the FCI and State Agencies.
  • All the food grains conforming to the prescribed specifications are procured by the public procurement agencies at the Minimum Support Price (MSP) plus incentive bonus announced, if any.
  • Quality Control Division of FCI ensures procurement of food grains from procurement centres in accordance with Govt. of India's uniform quality specifications.
  • FCI has also been nominated as an additional nodal Agency for procurement of Pulses and Oilseeds.
• Storage:
  • FCI accept only the surplus (after deducting the needs of the states under NFSA) from these state governments to be moved to deficit states.
  • FCI and Warehousing Development Regulatory Authority (WDRA) build warehouses with better technology for storage of surplus.
  • Farmers can deposit their produce to the registered warehouses, and get up to 80 percent advance from banks against their produce valued at MSP.
• Distribution:
  • FCI meets the requirements of TPDS (Targeted Public Distribution System) through grains procured which are issued at Central Issue Price fixed by Government to fulfill the objective of helping the economically vulnerable sections of society.
  • FCI delivers food grains to State Govt/ State Agencies from its base depots for distribution by the latter through Fair Price Shops.

Five point reforms suggested are:

• Change the public perception of FCI from being inefficient and corrupt to dynamic, inclusive and  honest
• Focus on integrating end-to-end tech solutions right from procurement to delivery to achieve operational efficiency & leakage free, distribution — reduce PDS response time, beneficiary tracking etc.
• Establish a grievance redressal mechanism to react rapidly to farmer/Farmer Producer Organisation in distress. Reaching out to farmers through “Jan Jagrukta” programmes at grass-root level to spread awareness.
• Plan for modern infrastructure & logistics. Upgrade warehouses to international standards. Improve storage capacity for the growing need – Power backup, CCTV, robust network facility.
• Global best practices to make India a ‘Food hub’.

PRACTICE QUESTION:

With reference to ‘Food Corporation of India’, consider the following statements:

1. It is a statutory body under the Ministry of Consumer Affairs, Food and Public Distribution.

2. It is mandated to recommend minimum support prices (MSPs) of 23 agricultural commodities

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer