Revival of our Granaries | Food Corporation of India | UPSC

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IASbhai Editorial Hunt

Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.– Helen Keller

Dear Aspirants
IASbhai Editorial Hunt is an initiative to dilute major Editorials of leading Newspapers in India which are most relevant to UPSC preparation –‘THE HINDU, LIVEMINT , INDIAN EXPRESS’ and help millions of readers who find difficulty in answer writing and making notes everyday. Here we choose two editorials on daily basis and analyse them with respect to UPSC MAINS 2020.

EDITORIAL 68:“A grain stockist with a role still relevant

       SOURCES:   THE HINDU EDITORIAL/EDITORIALS FOR UPSC CSE MAINS 2020

Sudha Narayanan

Sudha Narayanan is Associate Professor, Indira Gandhi Institute of Development Research, Mumbai

 

      HEADLINES:

A grain stockist with a role still relevant

      CENTRAL THEME:

In the middle of the pandemic, the FCI holds the key to warding off a looming crisis of hunger and starvation

SYLLABUS COVERED: GS 1:3:Food Security : FCI

      MAINS QUESTION:

For several years now, the Food Corporation of India (FCI) has drawn attention for all the wrong reasons. Do you think its right time for revival and strengthen our Granaries ? -(GS 3)

      LEARNING: 

This article briefly describes issues related to FCI

  • FCI approach
  • Principle etc .

This is an important article . Questions will appear in real exam from such issues .

      INTRODUCTION: 

Set up under the Food Corporations Act 1964, in its first decade, the FCI was at the forefront of India’s quest of self-sufficiency in rice and wheat following the Green Revolution, managing procurement and stocking grain that supported a vast Public Distribution System (PDS).
  • Over time, however, many began to see it as a behemoth that had long outlived its purpose.
  • Its operations were regarded as expensive and inefficient, a perception that has come to be accepted as fact.
  • Even in the 1970s and 1980s, poor storage conditions meant a lot of grain was lost to pests, mainly rats; diversion of grain was widespread, prompting a former chairman to declare that there was a problem with “human rats” as well.

      BODY: 

WHY IT IS BETTER PLACED :

  • PDS DEMANDS : Notwithstanding its dubious reputation, the FCI has consistently maintained the PDS, a lifeline for vulnerable millions across the country.

ISSUES CONCERNING FCI :

  • BUFFER STORAGE CAPACITY : Before the lockdown, many experts had observed that with 77 million tonnes of grains in its godowns and on the eve of a new round of procurement — of a bumper harvest of wheat — the FCI was facing a serious storage problem.
  • LIQUIDATION POLICY : This was worrying not just because of a shortage of modern storage facilities but also because the FCI lacked a “pro-active liquidation policy” for excess stocks.
  • THREE WAY PURCHASING : The FCI has also enabled purchases by States and non-governmental organisations directly from FCI depots, doing away with e-auctions typically conducted for the Open Market Sale Scheme (OMSS).

WHAT KEEPS FCI ON TRACK ? 

  • RAILWAYS (GOODS TRAINS ) : First, the FCI is overwhelmingly reliant on rail, which has several advantages over road transport.
  • In 2019-2020 (until February) only 24% of the grain moved was by road.

Containerised movement too, which is not the dominant way of transporting grain, is more cost-effective and efficient.

POSITIONING STRATEGY :

DECENTRALIZED APPROACH :

  • Given that the coming months will see predictable demand of staples from food insecure hotspots where migrant workers have just returned or where work is scarce, one strategy that has been adopted widely in international food aid by the United States, for example, is “pre-positioningshipments, where grain is stored closer to demand hotspots.
  • In the current context, it would be useful for the State government and the FCI to maintain stocks at block headquarters or panchayats in food insecure or remote areas.
  • This is especially relevant for regions that are chronically underserved by markets or where markets have been severely disrupted.
The FCI already has a decentralised network of godowns.

LAST MILE CONNECTIVITY :

  • Along with a pre-positioning strategy, this would provide flexibility to local governments to access grains for contextually appropriate interventions at short notice, including feeding programmes, free distribution to vulnerable and marginalised sections, those who are excluded from the PDS, etc.;
  • This also allows freedom to panchayats, for example, to sell grain locally at pre-specified prices until supply is restored.
  • In many States, there is a vibrant network of self-help groups formed under the National Rural Livelihoods Mission (NRLM) which can be tasked with last mile distribution of food aid other than the PDS.

PRINCIPLE :

  • Fourth, typically, the FCI’s guidelines follow a first in, first out principle (FIFO) that mandates that grain that has been procured earlier needs to be distributed first to ensure that older stocks are liquidated, both across years and even within a particular year.

REBUILDING SUPPLY CHAIN :

  • Fifth, today farmers across the country growing for markets are seeking to reach out to consumers directly, many out of sheer despair.
  • In many places, farmer producer organisations (FPOs) have been at forefront of rebuilding these broken supply chains.

      IASbhai Windup: 

  • The FCI along with the National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED), is well placed to rope in expertise to manage the logistics to support these efforts.
  • NAFED has already taken the initiative to procure and transport horticultural crops.
  • At the same time, the government needs to address the FCI’s mounting debts — an estimated ₹2.55 lakh crore in March 2020 in the form of National Small Saving Funds Loan a
  • There is no doubt that the FCI needs to overhaul its operations and modernise its storage.
  • At the same time, the relevance of an organisation such as the FCI or of public stockholding, common to most Asian countries, has never been more strongly established than now, even as we contemplate its new role in a post-pandemic world.

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