Governance

Govt wants to dump excess food grain in Africa

Food Corporation of India storages are spilling from excess food stocks and the new Kharif procurement season is only a month away

 
By Jitendra
Last Updated: Friday 20 September 2019
Central Warehousing Corporation Godowns in Bamanheri, Muzaffarnagar, Uttar Pradesh, operated by the Food Corporation of India. Photo: Wikimedia Commons

The Union government was mulling over selling excess foodgrains to some African countries before the new Kharif procurement season starts next month, according to a government official.

“There is a plan under consideration to use foodgrains as diplomatic tools for African countries like Ghana, which is a net food importer,” the official of the Union Ministry of Consumer Affairs, Food and Public distribution, told Down To Earth on the condition of anonymity.

“Ghana is a model country for the rest of West Africa in terms of governance and trade. If Ghana will start importing our foodgrains, other food-deficient countries on the continent like Nigeria, Cameroon, Namibia, Mauritania, Mali and others will follow suit,” he added.

A new trade agreement between India and Ghana as well as other African countries is yet to be signed.

According to the consumer affairs ministry, Food Corporation of India (FCI) godowns were spilling over due to excess buffer stocks. In the month of August, 2019, the total buffer stock was 71.1 million metric tonnes (MMT), which was double the food stocking norm of around 36.1 MMT.

In the month of July, the food stock was more than double than the prescribed norm. The stock of rice was more than 2.5 times than the norm whereas wheat was 1.84 times the given norm. The excess stock has been increasing since 2016. (See table)

The Union Ministry of Agriculture and Farmers’ Welfare has set an ambitious food grains target of 291.1 MMT for 2019-20. It is around 2.6 per cent higher than the previous year’s target, 283.7 MMT. Riding on a normal monsoon, the production of Kharif crops would be bumper.

 

July

Rice(MMT)

Wheat(MMT)

Total(MMT)

2019

28.42

45.83

74.2

2018

23.25

41.8

650

2017

21

32.2

53.3

2016

19.41

30.1

49.6

July buffer

 Norm

11.54

24.58

36.1

*MMT= Million metric Tonnes

Source: Ministry of Consumer Affair, Food and Public distribution

Ironical India

The development comes even as a recent report showed that every two out of three Indian children under the age of five died due to malnutrition.

The country provides cheap grains to 797 million out of its total 1.3 billion population under its flagship scheme National Food Security Act (NFSA). It provides 5 kg grains (Rs 3 per kg of rice and Rs 2 per kg of wheat) per person per month. For this, India requires around 4 million tonnes of grains every month.

There is another proposal to increment the allocation of food grain under the public distribution scheme (PDS). During the 2019 election campaign, then-incumbent Prime Minister Narendra Modi promised to provide sugar under PDS to dump surplus sugar at cheap rates (Rs 13.5 per kg) to every household.

At present, sugar is only distributed to 25 million household under the Antyoday Ann Yojana or AAY, a scheme for the poorest households.

After the thumping election victory, the Cabinet asked the ministry to prepare proposals for increasing the amount of grains from the current allocation of 5 kg per person by one or two kg under NFSA. But nothing concrete has come up yet.

FCI under debt

FCI is the arm of the Union government which is engaged in procurement, distribution and supply of grains in the Kharif and Rabi seasons. But FCI is currently under extreme debt of Rs 2 lakh crore or Rs 2 trillion.

FCI has been borrowing money from the government’s National Small Saving Fund (NSSF). In 2016-17, FCI borrowed Rs 66,000 crore from NSSF at an interest of 8.8 per cent after being advised by the Union government to do so as an emergency fund raising.

Stocking up of surplus grains and extreme debt also cast a shadow on the procurement of grain. FCI makes procurement at minimum support price fixed by the Government of India.

It further distributes at cheap rates to consumers under the PDS. The difference is paid by the Union government as food subsidy. The current food subsidy bill for FY 2019-20 is pegged at Rs Rs 2.21 lakh crore.

“Procurement would be done but the quantity might be reduced in order to check debt,” the official said.

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