Ministry for Consumer Affairs Food and Public Distribution–Year Review 2012

The year 2012 has been very eventful for the Ministry for Consumer Affairs Food and Public Distribution with many important decisions and initiatives taken for providing food security to vulnerable class by allocating more food grains at highly subsidised prices and strengthening overall food grains management. The year with its record grain procurement saw important steps being taken to augment the storage capacity especially through PPP, additional food grain allocation under Targeted Public Distribution System (TPDS). The end-to-end computerization of TPDS under is being strongly pursued by the Government with many States/UTs already taken commendable strides in this direction. Crucial decisions balancing the needs and benefits of farmers, industry and consumers in the sugar and edible-oils sector is yet another highlight of this year., The National Food Security Bill, 2011 was introduced in the Lok Sabha with the aim to bring in a food regime that will ensure the food security and nutritional needs of the low income and disadvantaged sections of our society.

Increase in procurement of wheat and rice

The year saw a record procurement of food grains.  In Rabi Marketing Season (RMS) April-March 2012-13 record quantity of 381.48 lakh tonnes wheat was procured. During Kharif Marketing Season (KMS), October 2011- September 2012, 350.36 lakh tonnes of rice was procured for the central pool.  During the on going KMS 2012-13 as on 14-12-2012, 138.62 lakh tonnes of rice has already been procured which is 5.5% higher than the quantity procured during the same period of previous KMS.  Higher MSP over the last few years, coupled with better outreach has led to higher procurement in the last few years. As a result, procurement of food grains has risen and the Central Pool stock had increased from 196.38 lakh MTs as on 1.4.2008 to a peak level 823.17 lakh MTs as on 1.6.2012. The safe upkeep of the stocks which reached record levels this year was a major challenge.

In order to keep prices of wheat and rice under check , the Government made allocation of total 95 lakh tonnes of wheat during the year for tender sale to bulk consumers/private traders. In addition, an allocation of 5 lakh tonnes of wheat and 5 lakh tonnes of rice was also made under Open Market Sale Scheme (OMS) for sale through States/UTs/Co-operatives.

MORE allocation under Targeted Public Distribution System(TPDS)

A quantity of 499.42 lakh tons of food grains has been allocated under Targeted Public Distribution System(TPDS) covering Antyodaya Anna Yozna (AAY), BPL and APL families for the year 2012-13. During the year, the Government made adhoc additional allocation of 50 lakh tons of food grains for the BPL families at highly subsidised prices.  Further on the recommendations of committee headed by Justice (Retd.) D. P. Wadhwa  an allocation of 19.42 lakh tons of food grains for the additional AAY and BPL families in the poorest districts of the country at AAY and BPL prices besides allocation of 7.26 lakh tons of food grains for the festivals, drought/flood relief, etc.  Thus, a total of 576.10 lakh tons of food grain has been allocated so far during the current year 2012-13 under TPDS against the total allocation of 565.70 lakh tons during 2011-12.  Further, 49 lakh tons of food grains has been allocated for Other Welfare Schemes like Mid-day Meal Scheme, Wheat Based Nutrition Programme under ICDS, Rajiv Gandhi Scheme for Empowerment of Adolescent Girls (RGSEAG) (SABLA), SC/ST/OBC Hostels Scheme, Annapurna Scheme and Emergency feeding Programme in Odisha.

INITIATIVES TO AUGMENT FODGRAINS STORAGE CAPACITY

            A number of steps have been taken to augment the storage capacities for food grains in view of increased procurement. The storage capacity, Covered and Cover and Plinth (CAP) available with the Food Corporation of India increased from 238.94 lakh MTs as on 31.3.2008 to 373.43 lakh MTs as on 30.11.2012, an increase of about 56%. The storage capacities, both covered and CAP, available with State agencies for storage of Central stock of food grains have also increased from 291.32 lakh MTs as on 31.3.2012 to 341.35 lakh MTs as on 30.11.2012. As a result, a total of about 715.00 lakh MTs of storage capacity was available for storage of Central stock of food grains.  However, to meet the storage requirement of an all time high stock levels of 823.17 lakh MTs, achieved this year, the FCI resorted to short term hiring and efficiently managed the stocks.

Related Topics  Farmers Welfare Schemes 

            With a view to incentivizing the creation of storage capacity further, the Government initiated the Private Entrepreneurs Guarantee (PEG) Scheme which aims to construct storage godowns through private entrepreneurs, Central Warehousing Corporation (CWC) and State Warehousing Corporations (SWCs).  Assessment of additional storage capacities under the scheme is based on overall procurement/consumption levels and the storage space already available.  Under the PEG Scheme, FCI guarantees a 10 years usage of storage capacities  to the private investors and 9 years to CWC and SWCs. Under the scheme, a capacity of 181.08 lakh MTs has been approved for the construction of godowns in 19 States out of which a capacity of 129.97 lakh MTs has been sanctioned for construction. A capacity of 32.27 lakh MTs has been completed out of which a capacity of 22.91 lakh MTs has been taken over during the year and the balance is expected to be taken over shortly.  Further capacity of about 65 lakh MTs is under construction.  It is expected that by March 2013, a capacity of 73 lakh MTs will be completed, thus solving the shortage of covered godown space to a great extent.

            For ensuring long term scientific storage, the Government has also approved construction of 20 lakh MTs of storage capacity in “silos” within the overall sanctioned capacity of the aforesaid mentioned PEG Scheme.             Besides the PEG Scheme which aims at creation of storage space through the PPP mode, the Government has finalised a Plan scheme for creation of an additional storage capacity of 5.40 lakh tonne in the North Eastern States through the FCI, in the next 3 to 4 years.

MEASURES TO ENSURE QUALITY FOODGRAINS

As a result of various quality control measures, there has been sharp decrease in quantity of damaged/non-issuable foodgrains in the FCI. The quantity of damaged/non-issuable foodgrains in FCI has come down from 1.35 lakh tons in the year 2002-03 to 0.014 lakh tons in the year 2012-13 (as on 01.11.2012).  In the percentage term, damaged/non-issuable stocks in FCI has come down from 0.10% in the year 2007-08 to 0.005% in the year 2012-13 (as on 01.11.2012).

END-TO-END COMPUTERIZATION OF PDS

            With a view to modernise the implementation of PDS, Department of Food & Public Distribution has made vigorous efforts towards computerisation of TPDS across the country. Computerisation of TPDS will help in correct identification of beneficiaries, minimise leakages and diversion of food grains, introduce accountability in implementation of TPDS, ensure dissemination of TPDS related information through SMS alerts, web portals, etc.

             The Government of India has approved a scheme on End-to-end Computerisation of TPDS Operations in all States/UTs with a total outlay of Rs. 884.07 crore on cost sharing basis under the 12th Five Year Plan (2012-17). In the first phase, the scheme covers various aspects such as creation of digitized beneficiary and other databases, supply chain management, transparency and grievance redressal mechanism using toll-free numbers, SMS alerts and portal etc. Digitization of beneficiary and other databases will be completed by March 2013 and computerization of supply-chain management would be completed by October 2013. All States & UTs have been requested to send their financial proposals at the earliest.

            Computerized Online Real-time Electronic PDS (COREPDS) project has been implemented in 151 FPSs in Raipur city since July, 2012 wherein the beneficiary may lift food grains from the FPS of his/her choice after biometric authentication in offline or online mode using smart ration cards. This has resulted in beneficiary satisfaction, minimising leakages, incentivising better performing FPSs, etc.  Use of Rashtriya Swasthya Bima Yojna (RSBY) cards as smart ration cards for TPDS of Chhattisgarh is also being taken up.

            In the State of AP, 47 FPSs of East Godawari district have been automated wherein food grains are distributed to beneficiaries after successful Aadhaar based bio-metric authentication at the FPS. Since October 2012, more than 50,000 sales transactions (food grain distribution) are reported to occur monthly with more than 97% accuracy and the system has also bought about 15% to 20% savings in the first month.

Related Topics  Rashtriya Gokul Mission

            All beneficiary databases has been digitised in Karnataka and 103 FPSs have been automated using electronic weighing machines cum point of sale machines.

            The center has also asked each State/UT to set up a toll-free helpline number (TFN) for grievance registration and redressal and that such number should be widely publicized. Department of Telecom has been asked to reserve ‘1967’ as 4-digit TFN for TPDS purposes across the country.

            As a result of State initiatives and this Department’s efforts, Digitization of Ration cards/Beneficiary database has been completed in Andaman and Nicobar Islands, Andhra Pradesh, Chhattisgarh, Daman and Diu, Delhi, Gujarat, Karnataka, Kerala, Puducherry, Tamil Nadu and Uttar Pradesh. Automation of Supply-Chain has been completed in States of Chhattisgarh, Delhi and Gujarat. Transparency Portal with PDS related information has been created in Andaman and Nicobar Islands, Chhattisgarh, Gujarat and Puducherry. Dissemination of information through SMS alerts regarding food grain dispatch/availability at FPS is operational in Chhattisgarh and Puducherry. Call Centre/Toll free helpline number for PDS has been established in Assam, Chandigarh, Chhattisgarh, Delhi, Gujarat, Haryana, Jammu & Kashmir, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Mizoram, Odisha, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal. Online Grievance redressal mechanism for registration and tracking of Grievances is available in Chhattisgarh, Delhi, Gujarat, Mizoram, Odisha and Tamil Nadu. All States/UTs are being pursued to computerise their TPDS operations in a time bound manner.

FETCHING SUBSTANTIAL FOREIGN EXCHANGE THROUGH EXPORT OF FOODGRAINS                                          

            Considering availability of sufficient stocks of food grains in Central Pool far in excess of buffer norm, the Government has allowed export of 2 million tons of wheat from Central Pool Stock of FCI through Central Public Sector Undertakings. A proposal to allow additional 25 lakh tonnes for export of wheat is under consideration.

            Besides, in view of comfortable stock position, the Government has put export of wheat and rice under OGL.  As on 19-11-2012, a quantity of 77.25 lakh tons of non basmati rice and 35.95 lakh tons of wheat have been exported under Open General Licence(OGL) out of privately held stocks, permitted on 8-9-2011. Due to rising trend in the prices of wheat in international market, these exports are fetching substantial foreign exchange for the country. Permission to export of wheat products upto 6.50 lakh tons through customs EDI ports on private account has also been extended upto 31st March, 2013.                                              

MORE AVAILABILITY OF EDIBLE OILS AT REASONABLE PRICES

To augment the availability of edible oils in the country and to provide relief to consumers from rising prices, especially the BPL households, the Government have taken various measures as:

·        The prevailing import duty structure of zero percent on crude oils and 7.5% on refined oil has been continued.

·        The existing ban on export of edible oil has been extended till further orders except for export of coconut oil through Kochi port and oils produced from minor forest produce and edible oils in branded consumer packs upto 5 Kg. with a ceiling of 20,000 tons per annum.

·         The State Governments have been allowed to impose the stock holding limits on edible oils and oilseeds for a further period upto 30.9.2013.

·        A scheme for distribution of subsidized imported edible oils implemented by Government since 2008-09 through State Governments/UTs @ 1 litre per ration card per month with a Central subsidy of Rs. 15/- per kg. has been continued during 2011-12 and further extended upto 30.9.2013.  So far States of Maharashtra, Goa, Tamil Nadu, Andhra Pradesh, Himachal Pradesh and Rajasthan have been allocated total quantity of about 5.87 lakh tons for period from October, 2012 to September, 2013.

Price management of sugar

·         The Central Government fixes the Fair and Remunerative Price (FRP) of sugarcane having regard to cost of production of sugarcane; return to the growers from alternative crops and the general trend of prices of agricultural commodities; availability of sugar to consumers at a fair price; price at which sugar produced from sugarcane is sold by sugar producers;   recovery of sugar from sugarcane etc. The FRP is a benchmark guaranteed price of sugarcane determined by the Central Government below which no sugar mill can purchase sugarcane from cane growers. For 2012-13 sugar season, the FRP has been fixed at Rs. 170/- per quintal linked to a basic recovery rate of 9.5%, subject to a premium of Rs. 1.79 per quintal for every 0.1 percentage point increase in recovery above that level.

Related Topics  Paramparagat Krishi Vikas Yojana

·         The Central Government vide notification dated 11.05.2012 has dispensed with the requirement of export  release orders for export of sugar under Open General License (OGL) during 2011-12 sugar season.

·         As the sugar production in 2011-12 was in excess of requirement for domestic consumption, the Government allowed export of sugar under Open General Licence (OGL) up to 36.73 lakh tonnes were registered upto 30.09.2012.
Through effective market interventions and timely decisions on sugar export, Department was able to achieve equilibrium  between maintaining reasonable prices of sugar for domestic market and speedier settlement of cane price arrears by improved cash flows with sugar mills.  The domestic sugar production and the stock availability was more than the requirement and the sugar industry was instrumental in exporting around 36 lakh MT of domestic sugar, thereby also earning valuable foreign exchange in the process, apart from getting improved cash flows.\

Further, in an attempt to provide freedom to the industry to handle its cash flow requirement, the system of monthly releases for the open market sale was changed to quarterly releases.

Similarly, in order to provide logistical freedom to the State Government to lift levy sugar for meeting the PDS requirement in time, the levy sugar allocation system has been shifted to quarterly regime.

In order to improve and systemize the data inflow the sugar industry on periodic basis, Department has created and implemented a web-based platform for online submission of inputs by the sugar mills in the country on monthly basis.  This system is expected to become the backbone of timely information generation for effective policy decision as well as for management of the sugar sector.

·         Sugar Development Fund is an important source of funds for providing loans at concessional rate to sugar factories, to modernize and expand their capacity and utilize the by-products like bagasse and molasses to improve revenue generation and their viability. As on date, the amount disbursed to various Sugar Mills for various schemes during the financial year 2012-13 is Rs. 308.58870 crore.

·         India held the Chairmanship of International Sugar Organisation for the calendar year 2012 and in the process, the 41st Meeting of International Sugar Organisation was held in New Delhi from 24th -26th April, 2012.  The meeting presented a forum for exchange of views on sugar related issues among various country delegates and stakeholders.

NATIONAL FOOD SECURITY BILL, 2011

Government of India has introduced National Food Security Bill, 2011 in the Parliament (Lok Sabha) with the objective to provide for food and nutritional security, in human life cycle approach, by ensuring access to adequate quantity of quality food at affordable prices to people to live a life with dignity. The Bill provides for coverage of upto 75% of the rural population, with at least 46% population belonging to priority households and upto 50% of the urban population, with at least 28% population belonging to priority households for receiving subsidized foodgrains under Targeted Public Distribution System (TPDS). The Bill also contains provisions for nutritional support to women and children besides provisions for meals to special groups such as destitute and homeless, emergency and disaster affected persons and persons living in starvation.  The Bill is under examination with the Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution since 5th January, 2012.

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Raja Raja Cholan
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