Buffer Stock & Buffer Norms in India
The Food Corporation of IndiaThe Food Corporation of India was setup under the Food Corporation Act 1964, in order to fulfill following objectives of the Food Policy: Effective price support ..... is the main agency for procurement, storage and distributionReturn to investors of the accumulated income of a trust or mutual fund and distribution of capital gains. of food grains. In addition to the requirements of wheat and rice under the Targeted PDS, the Central Pool Central pool procured food grains by the Central Government with the Food Corporation of India. The procurement of food grains by the FCI is higher ..... 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 systemPDS means distribution of essential commodities to larger section of the society, mostly vulnerable people, through a network of fair Price Shops on a recurring ..... 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)|
|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|
|As on First January|
|As on 1st April|
|As on 1st July|
|As on 1st October|
|All Data in Million Tonnes
Source: Food Corporation of India
Objectives of Buffer Stocks:
The buffer stocks are required to
Feed TPDS and other welfare schemes,
Ensure food security during the periods when production is short of normal demand during bad agricultural years
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|
|1st JAN, 2006||12.6||6.2||18.8|
|1st JAN, 2007||12.0||5.7||17.7|
|1st JAN, 2008||11.5||7.7||19.2|
|1st JAN, 2010||24.3||23.1||47.4|
|1st JAN, 2011||25.6||21.5||47.1|
|1st JAN, 2012||29.7||25.7||55.4|
|1st JAN, 2013||32.2||34.4||66.6|
|1st APR, 2006||13.7||2.0||15.7|
|1st APR, 2007||13.2||4.6||17.8|
|1st APR, 2008||13.8||5.8||19.6|
|1st APR, 2010||26.7||16.1||42.8|
|1st APR, 2011||28.8||15.4||44.2|
|1st APR, 2012||33.4||19.9||53.3|
|1st APR, 2013||35.5||24.2||59.7|
|1st JUL, 2006||11.1||8.2||19.3|
|1st JUL, 2007||11.0||12.9||23.9|
|1st JUL, 2008||11.2||24.9||36.1|
|1st JUL, 2010||24.3||33.6||57.9|
|1st JUL, 2011||37.1||26.9||64.0|
|1st JUL, 2012||30.7||49.8||80.5|
|1st OCT, 2006||6.0||6.4||12.4|
|1st OCT, 2007||5.5||10.1||15.6|
|1st OCT, 2008||7.9||22.0||29.9|
|1st OCT, 2010||18.4||27.8||46.2|
|1st OCT, 2011||20.4||31.4||51.8|
|1st OCT, 2012||23.4||43.1||66.5|
|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.