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FCI held more food grains than mandated buffer

On April 1, food grain stocks held by corporation stood at 36.69 million tonne

Policy Pulse
Publish Date: Apr 18 2016 2:51PM | Updated Date: Apr 18 2016 2:53PM

FCI held more food grains than mandated buffer

 In spite of selling more than seven million tonne of surplus wheat stocks through the open market sale scheme (OMSS) in FY16, the Food Corporation of India (FCI) continues to hold more grains than the authorised buffer stock at the start of ongoing fiscal, a report in ‘The Financial Express’ has said.

On April 1, food grain stocks held by FCI  stood at 36.69 million tonne (MT), against buffer norm of 21.04 MT.
At the start of the month, corporation had rice stocks of 22.16 MT, which excludes about 6.7 million tonne of rice yet to be received from millers. 
According to the stocking norm for April 1, the FCI should have a rice stocks of 13.5 MT.
In case of wheat, corporation has grain stock of 14.5 MT earlier this month, whereas the stocking norm stipulates only 7.4 MT of grain to be held with the government agencies. 
Against target of selling about 10 million tonne of wheat to buyers like food companies under OMSS, corporation had sold more than 7 million tonne by end of March 2016.
Economy cost for wheat for FCI for present fiscal is fixed at Rs 2,344 per .
Reserve price of wheat was fixed at Rs 1,550 per quintal under the OMSS in Haryana,Punjab, and Madhya Pradesh during earlier fiscal. 
For depots of FCI located outside these states, the reserve price of wheat was fixed at Rs 1,550 per quintal plus railway freight from Ludhiana to the nearest railhead and road transportation cost from such railhead to the depot.
For the rabi market season (2016-17), which commenced on April 1, FCI has commenced purchase of wheat from farmers in the key producing states of Punjab, Haryana, Madhya Pradesh and Rajasthan.
HLC report also pointed out that “a transparent liquidation policy is the need of the hour, which should automatically kick in when FCI is faced with surplus stocks than buffer norms. Greater flexibility to FCI with business orientation to operate in OMSS and export markets is needed”.