What is the issue of insufficient grains stock facilities of FCI?

Question: What is the issue of insufficient grains stock facilities of FCI?
The Economic Survey 2009-10 had suggested grain should be released in small batches to a large number of traders at prices significantly below the market price, but sufficiently above the procurement price. If the selling price is close to the procurement price, traders might just buy from the FCI and sell it back to the FCI, pushing grain off the market so that retail prices would stay high. (ET, Editorial March 15, 2010).

The issue of not sufficient grains stock facilities of Food Corporation of India was raised by Economic Times in March 2010. The newspaper said that 10 million tonnes (MT) of wheat, half of the Food Corporation of India’s (FCI) stock of the grain, is stored in the open and runs the risk of getting spoilt. By April 2010, the government was expected to procure another 24 MT of a record estimated 82 MT wheat output that would start arriving in the markets in April. Mountains of grain would be built and rot, even as food prices stay stubbornly up. The article in ET had urged the government to liquidate the 10 MT of wheat stored in the open, before fresh procurement begins. The newspaper further endorsed the recommendation as the buffer stocks of cereals are way too large — for wheat, five times the norm, and for rice, at 24 MT, twice the requirement.


  • Anonymous

    i feel enlightened…