Buffer Stock & Buffer Norms in India

The Food Corporation of India is the main agency for procurement, storage and distribution of food grains. In addition to the requirements of wheat and rice under the Targeted PDS, the Central Pool is required to have sufficient stocks of these in order to meet any emergencies like drought/failures of crop, as well as to enable open market intervention in case of price rise.

What are Buffer Norms?

The Buffer norms are the minimum food grains the Centre should have in the Central pool at the beginning of each quarter to meet requirement of public distribution system and other welfare measures. The last changes in the Buffer norms were in April 2005 and according to the norm:

  • The minimum rice in the Central pool should be 118 lakh tons on January 1, 122 lakh tons on April 1, 98 lakh ton on July 1 and 52 lakh tons on October 1.
  • Similarly, the quantity of wheat should be 82 lakh tons on January 1, 40 lakh tons on April 1, 171 lakh tons on July 1 and 110 lakh ton on October 1.

The above info is arranged in the following table:

Buffer Norms (from April 2005)
DATE RICE WHEAT TOTAL 
1st April12240162
1st July98171269
1st Oct.52100162
1st Jan.11882200
All Values Lakh Tons, Source department of Food and Public Distribution

Please note this important fact:

  • The Central pool requires maximum (269 Lakh tons or 26.9 million tons) of Rice + Wheat on 1st July.

The FCI has been constructing storage capacity for holding buffer and operational stocks of food grains at nodal points in the country. The storage capacities available with FCI are mainly used for storage of food grains and partly for other commodities and general warehousing. The allocations and actual expenditure for the aforesaid Plan Schemes for the years 1997-98, 1998-99 and 1999-2000 and allocation for 2000-2001 are given in the statement attached.

  • In addition, the Government has decided to create a Strategic Reserve of 50 lakh tonnes of food grains out of the domestic procurement, in addition to the buffer stock already held by FCI.
  • This 50 Lakh tones includes 30 lakh tonnes of Wheat w.e.f. 1.7.2008 and 20 lakh tonnes of Rice w.e.f. 1.1.2009.

Thus, the normal as well as strategic Buffer Norms have been shown in the following tables:

Buffer Norms Stock in Central Pool
RICEWHEATTOTAL
As on First January
Normal11.88.220
Strategic235
Total13.811.225
As on 1st April
Normal12.2416.2
Strategic235
Total14.2721.2
As on 1st July
Normal9.817.126.9
Strategic235
Total11.820.131.9
As on 1st October
Normal5.21116.2
Strategic235
Total7.21421.2
All Data in Million Tonnes
Source: Food Corporation of India

Objectives of Buffer Stocks:

The buffer stocks are required to

  1. Feed TPDS and other welfare schemes,
  2. Ensure food security during the periods when production is short of normal demand during bad agricultural years
  3. Stabilize prices during period of production shortfall through open market sales.

Any changes in the Buffer Norms in pipeline?

Yes, with the bulging procurement as well as the demand, the government had asked the National Centre for Agricultural Economics and Policy Research (NCAP) to study the buffer norm and make recommendation on increasing it if the demand has gone up. A technical group was also studying the report of NCAP. The new Buffer Norms have not been announced as of now.

What are the Current Buffer Stocks?

The following table shows the Buffer stock on April 2013.

Stock in Central Pool As on April 2013
AS ONRICEWHEATTOTAL
1st January
1st JAN, 200612.66.218.8
1st JAN, 200712.05.717.7
1st JAN, 200811.57.719.2
1st JAN, 201024.323.147.4
1st JAN, 201125.621.547.1
1st JAN, 201229.725.755.4
1st JAN, 201332.234.466.6
1st April
1st APR, 200613.72.015.7
1st APR, 200713.24.617.8
1st APR, 200813.85.819.6
1st APR, 201026.716.142.8
1st APR, 201128.815.444.2
1st APR, 201233.419.953.3
1st APR, 201335.524.259.7
1st July
1st JUL, 200611.18.219.3
1st JUL, 200711.012.923.9
1st JUL, 200811.224.936.1
1st JUL, 201024.333.657.9
1st JUL, 201137.126.964.0
1st JUL, 201230.749.880.5
1st October
1st OCT, 20066.06.412.4
1st OCT, 20075.510.115.6
1st OCT, 20087.922.029.9
1st OCT, 201018.427.846.2
1st OCT, 201120.431.451.8
1st OCT, 201223.443.166.5
All data in Million Tonnes. Source Food Corporation of India. Source

The above table shows India's comfortable position in the buffer stock which is sometimes more than double than the required buffer norms. However, it has raised the questions over the storage capability of the FCI and rotting grains in the open god downs in the country. The issue was again taken to the Supreme Court which suggested that government should distribute the grains free to the poor. The problem is immense, but solution of this problem is not instant. The FCI has to increase the storage capacity to accommodate the record procurement which is expected this year because of a very good monsoon. Next important post is about Cover & Plinth in India.

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Comments

  • ruturaj
    Reply

    informative article...gives factual as well as discriptive information.