Food Procurement and Distribution – PDS & NFSA, Shanta Kumar Committee, FCI restructuring, Buffer stock, etc.

May, 14, 2019

[op-ed snap] If food prices rise

CONTEXT

For 32 months running (from September 2016 to April 2019), consumer food inflation has been trailing general retail inflation.

Background

  • To understand its significance, rewind to the preceding 32 months (from January 2014 to August 2019), when in as many as 25 months the annual increase in food prices exceeded overall consumer inflation.
  • Food prices aren’t pinching as before and have also not been a hot-button issue in the current Lok Sabha elections — unlike in 2014, when they were one of the key reasons for the then Congress-led ruling alliance’s rout.
  • Bringing down retail food inflation from near double-digit to low single digit levels — even negative in many months — has, indeed, been a signal achievement of the government.

Impact of Low inflation

  • However, it hasn’t been an unmixed blessing.
  • While consumers have benefitted, the same cannot be said about farmers, for whom flat or falling prices of food and other agri produce have spelled disaster.

Reversal of trend  –

  • Meanwhile, there are also signs of a trend reversal.
  • The last couple of months have seen prices of a host of farm commodities — from coarse grains, cattlefeed ingredients and cotton to tomatoes and seasonal vegetables — going up significantly.
  • Even milk and sugar are beginning to shake off a prolonged bear phase.

Reasons for reversal

  • The immediate trigger for this seems to be drought in large parts of Maharashtra, Gujarat, Karnataka, Andhra Pradesh and Telangana.
  • But there could be structural reasons as well.

Disastrous for farmers –

  1. Cutting down crop acreages – It is not difficult to believe that sustained low produce realisations have broken the backs of many farmers, leading them to cut down crop acreages or underfeed their cattle.

2. Impact on yields – These are bound to impact yields and supply at some point. In that case, a normal monsoon alone, as forecast by the Met Department, may not be enough.

3. Long time to overcome the decline in productivity – Farmers aren’t going to ramp up output overnight, just as insufficiently nourished bovines will take time to calve and produce close to their genetic potential.

4. Return of food inflation – If structural supply constraints combine with a not-so-great monsoon, the result may well be a return of food inflation.

Way forward

  • That, on the face of it, may not be good news for the next government.
  • The mistake it should avoid is to clamp the usual restrictions on exports, internal trade and stocking, even while allowing unlimited imports at zero duty.
  • On the contrary, this is the time to scrap the Essential Commodities Act and laws allowing agricultural produce trade only in government-controlled wholesale mandis.
  • The current food inflation, if at all, is a necessary price correction that will help restore farmer confidence.
  • Improved price realisations would also create an environment to phase out wasteful government spending, whether through market-distorting minimum support price procurement operations or under-pricing of fertilisers, water and electricity.
  • Farmers deserve remunerative prices, not handouts.
Oct, 02, 2018

Odisha to launch State Food Security Scheme

Note4students

Mains Paper 3: Agriculture | Public Distribution System – objectives, functioning, limitations, revamping; issues of buffer stocks and food security

From UPSC perspective, the following things are important:

Prelims level: SFSS

Mains level: Food Security in India


News

Odisha Scheme for NFSA Left-outs

  1. The Odisha will launch its own State Food Security Scheme (SFSS) which would be totally funded by the state government.
  2. Over 18 lakh poor and eligible people left out under National Food Security Act, 2013 (NFSA) will receive their quota of 5 kg of rice at the rate of Rupee 1 per kg .

State Food Security Scheme (SFSS)

  1. The state government decided to launch its own food security scheme after the Centre did not respond to Odisha government’s request to add additional 25 lakh poor people under the NFSA.
  2. 25 lakh beneficiaries will be provided with cheap rice under the SFSS.
  3. A total of 3,26,41,800 beneficiaries were included in the NFSA as per the 2011 census.
  4. Over 73 per cent of the target for SFSS has been achieved by September 30 and rest will be covered by the second week of October.
  5. The state government on October 2, 2008 had launched the cheap rice scheme in Odisha where beneficiaries were given rice at the rate of Rs 2 per kg.
  6. Later in 2013, the price of cheap rice was reduced to Rupee 1 a kg for people living below poverty line.
Sep, 06, 2018

[op-ed snap] Steps to stop the rot: on dangers of storing foodgrains in the open

Note4students

Mains Paper 3: Agriculture | Public Distribution System – objectives, functioning, limitations, revamping; issues of buffer stocks & food security

From UPSC perspective, the following things are important:

Prelims level: PDS system, Food Corporation of India

Mains level: Foodgrain storage practices in India & how it leads to huge wastage of foodgrains


Context

Storage of foodgrains inefficient

  1. Most grain in India, which is procured from farmers by the government, is stored using the CAP, or cover and plinth method
  2. The agencies build a cement plinth and pile up foodgrains in bags and then cover all this with a tarpaulin
  3. India stores about 30.52 million tonnes of rice, wheat, maize, gram and sorghum in such structures at the Food Corporation of India godowns and hired spaces
  4. It is estimated that there is a 10% loss of harvested grain, of which 6% (around 1,800,000 tonnes) is lost in storage
  5. This means that the grain is so damp and fungus-ridden that it cannot be ground and passed on to the public for consumption

Effects of eating mouldy grains

  1. Eating mouldy grain causes a variety of illnesses
  2. According to a World Health Organisation paper, mycotoxins, which are found in mouldy grain/foods, are associated with human disease and produce aflatoxins (cancer-causing), trichothecenes, ochratoxins, citrinin and other toxins
  3. Aflatoxicosis causes abdominal pain, vomiting, hepatitis and (sometimes) death after acute exposure to high concentrations in food
  4. Chronic low dose exposure to aflatoxin can result in impaired growth in children

International storage practices

  1. In other parts of the world, grain is stored in silos
  2. Here, stored grain is kept dry and aired so as to prevent fungal and insect attacks
  3. The U.S. has a permanent storage capacity nearly equivalent to its annual grain production

Status of storage in India

  1. In India, the government has considered only four silos to be sufficient for the nation’s needs — one each in Kolkata, Chennai, Mumbai and Hapur-Ghaziabad
  2. The remainder of government-procured grain is stored in shoddy conditions
  3. In order to export basmati rice, Punjab has, in a public-private partnership, built modern, temperature-controlled grain silos with a storage capacity of 50,000 tonnes — but this is not for the Indian market

Way Forward

  1. Even though foodgrain production has been encouraged and increased, there need to be efforts to ensure that grain being procured annually is stored properly
  2. There is now an abundance of steel, cement and other building materials, money and the technological know-how
  3. The government should move on a war footing to store food grains in the proper manner
Jun, 25, 2018

[op-ed snap] For nutrition security: On undernourishment

 Note4students

Mains Paper 1: Social issues | Poverty & development issues

From UPSC perspective, the following things are important:

Prelims level: State of Food Security and Nutrition in the World report, National Food Security Act

Mains level: State of undernourishment in India & Government interventions for same


News

Report on food security

  1. The UN’s State of Food Security and Nutrition in the World report for 2017 has important pointers to achieve nutrition policy reform
  2. India remains lacking in the commitment to tackle undernourishment
  3. At the global level, the five agencies that together produced the assessment found that the gains achieved on food security and better nutrition since the turn of the century may be at risk

Deprivation on the rise

  1. The estimate of 815 million people enduring chronic food deprivation in 2016, compared to 775 million in 2014, is depressing in itself
  2. The deprivation is even greater among people who live in regions affected by conflict and the extreme effects of climate change
  3. The report says that child under-nutrition rates continue to drop, although one in four children is still affected by stunting

Reasons for food scarcity

  1. The impact of the economic downturn
  2. Many violent conflicts
  3. Fall in commodity export revenues
  4. Failure of agriculture owing to drought and floods

India’s efforts

  1. India’s efforts at improving access to food and good nutrition are led by the National Food Security Act
  2. There are special nutritional schemes for women and children operated through the States
  3. In spite of such interventions, 14.5% of the population suffers from undernourishment, going by the UN’s assessment for 2014-16. At the national level, 53% of women are anemic.

Way Forward

  1. The report on nutritional deficiency should serve as an opportunity to evaluate the role played by the PDS in bringing about dietary diversity for those relying on subsidized food
  2. The NITI Aayog found that families below the poverty line consumed more cereals and less milk compared to the affluent
  3. Complementing rice and wheat with more nutritious food items should be the goal
Nov, 08, 2016

[op-ed snap] Nutrition security has a much wider connotation than food security

  1. Context: Only five States, Punjab, Haryana, Chhattisgarh, Maharashtra and Rajasthan, have fully executed National Food Security Act
  2. Aim of NFSA: likely to benefit 720 million people through availability of 5 kg/capita/month of subsidised foodgrains at a much lower rate than in open market
  3. Free daily meals for children, maternity benefits, including cash for pregnant women, to combat undernutrition and malnutrition
  4. Administrative steps needed: Abolition of private procurement and storage system, controlling diversion of foodgrain from godown to the millers
  5. Proper recording of procurement, storage and distribution of grains across the departments
  6. Distribution through self-help groups and gram panchayats, regular monitoring at block and ward levels
  7. Positive outcomes in the 5 states: significant increase in number of households having ration cards, improvement in distribution and consumption of food
  8. Nutrition Security: encompasses a biological approach- adequate and safe intake of protein, energy, vitamin and minerals
  9. Under PDS, poor quality of food, lacking essential micronutrients and no diet diversity, and unhygienic conditions of storage come in the way of providing adequate nutrition
  10. Measure to increase nutrition: NFSA to provide one additional coarse cereal, viz., millet along with wheat and rice
Nov, 04, 2016

Food Security Act implemented: Paswan

  1. Source: Food Minister Ram Vilas Paswan
  2. What: The National Food Security Act (NFSA), which envisages supply of subsidised foodgrains, has been implemented across the country
  3. Why: Kerala and Tamil Nadu have also rolled out the NFSA from November. With this, the Act now has been implemented in all the States and Union Territories
  4. 81.34 crore persons will get wheat at Rs. 2 per kg and rice at Rs. 3 per kg
Feb, 03, 2016

Govt to announce NFSA with Rs 1,30,000 crore outlay

Govt is gearing up to announce a mammoth rollout of NFSA with an outlay at Rs 130,000 crore, which will be double the number earmarked in this year’s Budget.

  1. The planned commitment is greater than the entire allocation towards food subsidy in this year’s Budget — Rs 124,419 crore and the full-fledged rollout of the Act will begin from April 1.
  2. Some 1.8 lakh fair price shops across the country will have electronic point of sale devices to authenticate beneficiaries at the time of distribution.
  3. The quantum of grains distributed to each family will be electronically captured.
  4. The number of these shops, at 70,000 now, will increase to 5.52 lakh by March 2017.
Feb, 02, 2016

Gujarat got four extensions on Food Security Act

  1. Gujarat has not yet implemented the National Food Security Act (NFSA).
  2. It received four consecutive extensions from the Centre.
  3. The govt. says it has prepared the list of beneficiaries according to provisions of the Act.
  4. As per the latest extension, the State will implement NFSA from April 2016.
  5. A PIL petition was filed in the High Court demanding compensation from the State for its failure to implement the law.
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