Cabinet committee decides to reduce food buffer stocks

Go ahead for Department of Food and Public Distribution to offload excess stocks in the open market or export

 
By Jitendra
Last Updated: Saturday 04 July 2015

Photo: Rakesh Kumar Malviya

The Union government has decided to reduce its buffer stock of grains for the first quarter of this year, starting January 1, by 4 million tonnes. The revised buffer for January 1 is 21.41 million tonnes of wheat and rice as against the present 25 million tonnes. Similarly, the quantity of buffer stock to be maintained in the next quarter, starting April 1, has also been reduced from 21.2 million tonnes to 21.04 million tonnes.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, gave its approval to revise the buffer norms on how much foodstocks is to be maintained in the government’s central pool on January 16.
The buffer norms are decided separately for four different quarters in a year.

Experts have lauded the government move to rationalise foodgrain buffer stocks, but also expressed concern over government’s disinterest in increasing minimum support price (MSP). 

Ramesh Chand, an agro-economist, says that the government has already procured in excess in the past five years and is unable to dispose of the stocks in the face of declining international market rate, especially for rice.
 
“Now government is facing difficulty in disposing of the excess procured in the past few years,” says Chand.

Ashok Gulati, former chairperson of Commission for Agricultural Costs and Prices (CACP), which recommends to the government the minimum support price to be paid for foodgrains under public procurement, says that government has been maintaining buffer stocks, which are more than the stipulated limit. “Government has excess of nearly 49 million tonnes of grains. It is more than double of government’s stipulated limit,” says Gulati.
  
The present buffer norms for foodgrains in the central pool are in existence since April, 2005.  Lifting of foodgrains under the Targeted Public Distribution System (TPDS) has increased significantly in the past few years.
 
The CCEA has also given the go ahead to the Department of Food and Public Distribution to offload excess stocks in the open market or export if the stock of food grains in the central pool is more than revised buffer norms. An Inter-ministerial Group, consisting of secretaries for the Department of Food & Public Distribution, expenditure and consumer affairs, has been constituted for this purpose.

Bad news on MSP front

Delhi-based food rights activist, Biraj Patnaik, also lauded the government decision. “It’s good move to off load what is extra. It helps in better management of grains, especially wheat and rice. It may affect grains market,” says Patnaik. “But at the same time government is discouraging farmers by not increasing MSP. This year’s increment in MSP is the lowest in the past 10 years,” he says.

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