Year End Review

 Ministry of Consumer Affairs, Food and Public Distribution achieved new milestone during 2013 with the enactment of historic National Food Security Act.  The largest social welfare programme of the world would provide legal right to about 82 crore people for subsidized foodgrains. Deregulation and decontrol of sugar sector in the interest of the industry and farmers both, was also a watershed decision taken by the ministry. A number of other steps initiated during the year will have far-reaching impact on foodgrain management to make it more efficient.  Not only storage capacity was added but also transit and storage losses brought down significantly.

Important decisions and initiatives taken by the Ministry during the year were follows:

National Food Security Act enacted

            As passed by the Parliament, the Government notified the National Food Security Act, 2013 on 10^th September, 2013 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 Act provides for coverage of upto 75% of the rural population and upto 50% of the urban population for receiving subsidized foodgrains under Targeted Public Distribution System (TPDS), thus covering about two-thirds of the population. Persons belonging to eligible households will be entitled to receive 5 Kilograms of foodgrains per person per month at subsidised prices of Rs. 3/2/1 per Kg for rice/wheat/coarse grains, provided that existing Antyodaya Anna Yojana (AAY) households, which constitute the poorest of the poor, will continue to receive 35 Kgs of foodgrains per household per month.

                  The Act also has a special focus on the nutritional support to women and children. Besides meal to pregnant women and lactating mothers during pregnancy and six months after the child birth, such women will also be entitled to receive maternity benefit of not less than Rs. 6,000. Children upto 14 years of age will be entitled to nutritious meals or take home rations as per the prescribed nutritional standards. In case of non-supply of entitled foodgrains or meals, the beneficiaries will receive food security allowance. The Act also contains provisions for setting up of grievance redressal mechanism at the District and State levels. Separate provisions have also been made for ensuring transparency and accountability.

            The Act provides for a period not exceeding 365 days after the commencement of the Act, for identification of eligible households for receiving subsidized foodgrains under the Targeted Public Distribution System (TPDS). Implementation of the Act has started in 4 States viz. Haryana, Rajasthan, Delhi and Himachal Pradesh and allocation of foodgrains under TPDS under the Act has also been made to them.

 Deregulation and Decontrol of Sugar Sector

            Acting on the recommendations of Dr. C. Rangarajan Committee, which was constituted to look into the deregulation issues of sugar sector, the government took landmark decisions to dismantle the major regulatory controls on sugar. The levy obligation on the sugar mills was dispensed away and government took additional subsidy burden of around Rs. 3000 crores to continue the concessional sugar supplies through Public Distribution System (PDS) in the country. Similarly, the regulated release mechanism for free sale of sugar was removed and sugar mills have the freedom to plan their cash flow operations without any restrictions. In tune with the efforts of liberalization, the sugar exports are virtually free now, except for prior registration with DGFT, while the sugar imports entail a reasonable duty of 15%.

                        Despite removal of regulatory regime, the prices of sugar in the open market remained contained. In fact, country produced surplus sugar for 3^rd consecutive sugar season, which culminated on 30thSeptember, 2013.

                        The government announced a very attractive Fair and Remunerative Price (FRP) for 2013-14 sugar season i.e. basic FRP at 9.5 % recovery of Rs.210/- per quintal with additional increase of Rs.2.21 for every 0.1% point increase in the basic recovery % which is an enhancement of Rs. 40/quintal on the basic rate from 2012-13 sugar season. The FRP is the benchmark guaranteed price for sugarcane below which no sugar mill can purchase sugarcane from cane growers in the country.

                  In order to zero down on the major hurdles impacting the sugarcane productivity and sugar recovery in the country, the Department constituted a Working Group which has come out with substantial recommendations which would be taken up gradually for implementation.

                        The concessional loan activities for sugar mills, under Sugar Development Fund (SDF) were continued. As on 30/11/2013 around Rs. 383 crores was disbursed to the sugar mills for activities aimed at cane development, diversification into cogeneration as well as ethanol manufacture and modernization/ expansion of production capacities during the current Financial Year.

A web-enabled module, which is fully operational now, facilitates digital exchange of production/dispatches/stocks information between the sugar mills and the Department.

A smooth transition was made in instituting the sugar subsidy disbursement to the states/UTs on removal of the levy supply system for PDS. As on date, around Rs.  685 crores has been disbursed to the states / UTs under the new system during the current Financial Year.

  Improvement in Foodgrains Management

                       Storage capacity requirement of FCI depends upon the procurement level, buffer stocking and PDS requirement of the Consuming States. In view of increased procurement and storage needs, storage capacity with FCI has increased substantially since its inception on account of construction and hiring.

Due to increased procurement during the last few years starting 2008-09, central pool stock level has continuously risen. FCI has responded swiftly to this challenge and total storage capacity available with FCI and State procuring agencies has gone upto 763.35 LMT as on 31.10.2013 as compared to 583.86 LMT as on 01.04.2010.

Capacity with FCI has increased from 238.94 LMT as on 31.03.2008 to 384.17 LMT as on 31.10.2013. Besides this, FCI is in the process of adding approx. 80-100 LMT to its capacity in the next 2 years.

The details of storage capacity with FCI (Owned/hired) and storage capacities with State Govt. /Agencies (excluding capacities assigned to FCI) as on 31.10.2013 are as under:

 (Fig. in LMT)

Apart from this, to augment the covered storage space for safe storage of food grains, the details of projects undertaken by FCI/Govt. of India are given as under:-

Creation of covered storage capacity under plan scheme

 FCI’s owned capacity is created under the Plan Scheme approved by GOI under Five year plans. There is a proposal to construct new godowns of 610860 MT capacity by FCI during 12th Five Year Plan (2012-17) (534640 MT NE & 76220 MT Others) under Plan Scheme on Storage Construction Programme of Ministry of CAF&PD, Deptt. of F&PD, Govt. of India. Under this scheme, a capacity of 4,570 MT has been completed during 2012-13.

 Capacity addition under Private Entrepreneurs Guarantee (PEG) scheme:

Under PEG scheme, a capacity of 203.76 lakh MT has been approved for construction of godowns at various locations in 19 states. Out of this, tenders have been sanctioned for a capacity of 113.26 lakh MT to private investors and a capacity of 7.96 lakh MT and 29.57 lakh MT have been allotted to CWC and SWCs respectively for construction of godowns on their own land (total capacity sanctioned/ allotted 150.79 LMT). A capacity of 82.00 lakh MT has already been completed.

  Modernization of storage facilities in the form of   SILOS:

                        In its meeting held on 07.02.2012, EGoM approved the proposals for the creation of 20 lakh MT capacity in the form of modern Silos throughout the country.  These 20 LMT Silos would be created against the capacity approved/ storage gap already assessed under the PEG Scheme. Board of Directors of FCI finalized the State wise distribution and location of capacities of 20 lakh MT of Silos.

                        E-tender inviting bids under DBFOO model for a total capacity of 17.50 Lakh MT capacities in 36 locations across 9 states of India has been launched by FCI on 21st November 2013.

                        Total allocation under the Food Security Act is presently estimated to be 61.2 million tonnes. Against this, FCI and State procuring agencies have a total capacity of around 76 million tonnes. Further, 8-10 million tonnes capacity is likely to be added during next 2 years through PEG Scheme/ SILOS. Thus, the issue of storage space has been sufficiently addressed.

Creation of scientific storage facilities:

All FCI godowns are constructed scientifically as per BIS Code and CPWD specifications, for safe storage of food grains. Further, FCI has ensured construction of modern scientific godowns only, through private entrepreneurs, for hiring for ten years. For this purpose, technical specifications have been mentioned in the MTF (Model Tender Form) itself. Inspections of these godowns are conducted at various stages of construction so that there is no deviation from the specifications mentioned.

Moreover, action plan has been framed to upgrade the physical infrastructure of all the godowns to bring them to well defined acceptable National standards. 80 depots have been identified to be upgraded during the financial year 2013-14. The process of up-gradation includes replacement of outlived ACC/CGI sheets roofing with the pre-coated profile sheets, replacement of damaged bituminous road with cement concrete road, resurfacing of worn out bituminous surface of road & improvement of boundary wall etc.

The detail of budget allocated to Zones/Regions during FY 13-14 for up-gradation is as under:

As on 31.10.2013, 17 depots have been upgraded and work in other depots are in progress.

Bringing down the storage and transit losses

Storage Losses:

            Storage loss is revealed as and when the stock of foodgrains in a stack is completely issued or cleared.  It represents the difference between the stock balance as per books and physical stock balance.  Percentage of loss is calculated commodity wise on the shortage observed in the stacks killed to the total weight held in the stacks killed during the month in a depot.

Percentage-wise comparison of trend of storage loss for the last 2 years and 2013-14

·         The year 2011-12 is audited figure.

·      The figures for 2012-13 & 2013-14 are provisional.

·   (-) Minus indicates Gain

Transit Losses:

            The difference between the dispatch weight and receipt weight represents the transit loss during movement of stocks from one centre to another centre either by road or rail.

Percentage-wise comparison of trend of transit loss for the last 2 years and 2013-14

·               The year 2011-12 is audited figure.

·               The figures for 2012-13 & 2013-14 are provisional.

Steps taken for safety of foodgrains during storage and transit

• A study has been awarded to ICAR on fixation of scientific norms of storage losses in foodgrains.
• Adhoc norms of the storage losses in wheat and rice have been fixed by the Ministry.
• Creation/ hiring of additional covered storage capacity.
• Disciplinary actions against the employees for unjustified losses.
• Surprise/ squad inspections and special physical verification of stocks.
• Adherence to FIFO in issue/ dispatch of stocks.
• Regular review of trends of storage and transit losses.
• Fixation of responsibility and recovery from transport contractors if found responsible for losses.
• Zero PV, in addition to regular Annual/ Quarterly PV is also under taken.

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