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INDIA’S FOOD & PDS MANAGEMENT
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- History : In June 1991, an independent Ministry of Food was created. But in March 1992 in order to improve efficiency, the Ministry of Food, which was having a single department, was divided into two departments
- Department of Food and
- Department of Food Procurement and Distribution.
- Nomenclature: On 15th October 1999, the Ministry of Food and & Consumer Affairs was renamed as the Ministry of Consumer Affairs & Public Distribution, however having the same departments. On 17th July 2000, the then Ministry of Consumer Affairs and Public Distribution was renamed as the Ministry of Consumer Affairs, Food and Public Distribution, with two departments, namely
- Department of Food & Public Distribution and
- Department of Consumer Affairs
- Department of Food and Public Distribution: Its functions are (As per Allocation of Business Rules)
- Public Distribution System
- Hiring and acquisition of godowns for storage of foodgrains including sugar, taking on lease etc.
- Matters relating to the Food Corporation of India and the Central Warehousing Corporation
- Purchase of foodstuffs for civil requirements and their disposal and also for military requirements
- Inter-State trade and commerce in respect of foodgrains and other foodstuffs including sugar
- Trade and commerce in, and supply and distribution of, foodgrains
- Trade and commerce in, and the production, supply and distribution of sugar and other foodstuffs
- Price control of sugar, foodgrains and foodstuffs
- Price Control of and inter-state trade and commerce in and supply and distribution of Vanaspati, Oilseeds, Vegetable Oils, Cakes and Fats
- Matters relating to the Development Council of Sugar Industry, New Delhi
- Molasses | Alcohol – industrial and potable from the molasses route | Stand-alone Distilleries
- Participation in international Conferences, Associations and other bodies concerning food
- Entering into treaties and agreements with foreign countries and implementing the same
- Department of Consumer Affairs: Its functions are
- Implementation of Consumer Protection Act, 1986, BIS Act, Standards of Weights and Measures - The Legal Metrology Act, 2009
- Regulation of Packaged Commodities – The Essential Commodities Act, 1955 (10 of 1955)
- Prevention of Black Marketing and Maintenance of Supply of Essential Commodities Act, 1980
- Training in Legal Metrology
- Laying down specifications, standards and codes and ensuring quality control of bio-fuels for end uses.
- Consumer Cooperatives
- Warehousing Development and Regulatory Authority (WDRA): New rules promote increase in the number of warehouses registered with WDRA. This would enhance facility of pledge finance for the farmers through Negotiable Warehouse Receipts (NWR) system. Electronic Negotiable Warehousing Receipt (eNWR) System and WDRA Portal launched to transform the process of registration of warehouses online and to issue e-NWR instead of paper-NWR which will be a more credible financing tool.
- In 2020 and '21, the figures government records show for PDS offtake, procurement, warehouse stocks, and foodgrain exports indicate a new record. Huge farm produce and government initiatives enabled these. During the Covid-19 pandemic, “food” (rice and wheat) was channelled through the public distribution system (PDS) for the social safety net programme.
- PDS Offtake: Until 2019-20, offtake of grain from the Food Corporation of India’s (FCI) godowns averaged hardly 62 million tonnes (mt) per year. Mostly it comprised PDS rations under the National Food Security Act (NFSA) of 2013. This 2013 law (UPA regime) entitles 81.35 crore Indians to receive at least 5 kg of wheat or rice per month at Rs 2 and Rs 3 per kg, respectively. The annual foodgrain allocation under NFSA – which includes a higher 35-kg monthly ration for 2.37 crore “poorest of the poor” households under the Antyodaya Anna Yojana – works out to nearly 55 mt. In 2020, during the lockdown, the NDA government launched a new Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). The NFSA beneficiaries were now provided an extra 5 kg grain per month free for April-November 2020, making it an additional allocation of over 32 MT. Offtake of rice and wheat from the central pool crossed an all-time-high of 93 MT in 2020-21, roughly 50% higher. Much of this was due to PMGKAY, which, along with the Atmanirbhar Bharat Package (for returning migrant labourers) and other lockdown-related schemes, saw a total lifting of about 31.5 mt. PMGKAY has been re-launched in 2021 too, due to the second wave. To begin with, the government allocated the 5-kg extra free grain per month to NFSA beneficiaries only for May and June 2021. But on June 7, it announced its extension up to Diwali, i.e. November.
- Foodgrain procurement: Government has procured 42.3 mt of wheat and 55.4 mt of rice from the 2020-21 crops, till June 2021. This broke the record 39 mt and 51.8 mt that got procured in 2019-20. The government has, in the post-pandemic period, both distributed as well as procured more grains than ever before. The increased procurement is a fallout of the farmers' movement against the new farm reform laws. The minimum support price (MSP) value of the paddy and wheat bought by government agencies since October 2020 (new farm laws passed in Sept.) came to Rs 2,38,250 crore. Some 38.5% of that amount has gone to Punjab and Haryana, whose farmers led the protests. The government is convincing the farmers that its reform laws aren’t aimed at ending the MSP-based procurement regime. Record procurement is the strongest defence against allegations of being anti-farmer.
- Foodgrain stocks in warehouses: Even after the unprecedented 93 mt-plus offtake, thanks to PMGKAY, stocks of rice and wheat in the Central pool were at an all-time-high of 109.44 mt as on June 1, surpassing 2019-20's 97.27 mt at this point. Stock levels rose since 2017, reversing the declining trend of the preceding four years. If stock accumulation has largely to do with the political economy compulsions of MSP-based procurement, Covid-time distress has provided an opportunity for cutting down FCI’s grain mountain. FCI’s “economic cost” of procuring, handling, transporting, storing and distributing grains was Rs 39.99 per kg for rice and Rs 27.40/kg for wheat in 2020-21. The subsidy on the 31.5 mt of grains (20.8 mt rice and 0.7 mt wheat) distributed free under PMGKAY and other special relief programmes would be Rs 1,12,500 crore. The actual cost, though, would have been lower, because FCI also incurs interest and storage expenses in holding excess stocks in its godowns. This “carrying cost of buffer”, pegged at Rs 5.40/kg in 2020-21, is saved even when grain is given out free. The corresponding annual savings on 31.5 mt would be Rs 17,000 crore. Similar savings will accrue on the 28 mt additional grain allocations under PMGKAY for 2021-22.
- Foodgrain exports: Year 2020-21 saw a record 19.8 mt of rice and wheat being exported from India. This quantity shipped out was grain procured from the open market. As per Department of Food and Public Distribution, only 75,000 tonnes wheat and 4,000 tonnes rice got exported from the central pool in 2020-21, on “humanitarian grounds”. The exports surge was aided by the hardening of international prices, as seen in the UN Food and Agriculture Organization’s Cereal Price Index hitting a 95-month-high in May 2021. The competitiveness of Indian rice and wheat is enabled by recycled/ leaked grain from the PDS. Given the massive quantities offered free/near-free under PMGKAY/NFSA, a lot of this grain has got diverted to the open market or even for exports.
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