The Food Corporation of India (FCI) has commenced distribution of wheat procured in the current rabi season (2015-16) to the states for delivery to consumers under the public distribution system.
And for this purpose the corporation has modified the ‘first in first out’ (FIFO) policy this year as most of the grain procured this year suffers from lustre loss and cannot be stored for a long period.
“A major chunk of wheat procured does not suffer from any nutritional deficiency, but because of lustre loss the grain can’t be stored beyond a year,” a food ministry official told FE.
Under the FIFO policy, FCI supplies foodgrain, mostly consisting of rice and wheat, to PDS from the previous year’s stocks, while the new crop is stored.
Sources said that as FCI needs about 24-25 million tonne of wheat annually for distribution through PDS, a few million tonne of grain would be still left to be distributed from this year’s stock.
The government procured more than 28 million tonne of wheat in the current marketing season.
The food ministry had to relax norms for wheat procurement this year after unseasonal rains and hailstorms in March affected the crop.
Sources said that out of around 20 million tonne of wheat, which had been procured under relaxed specification (URS) in northern states of Punjab, Haryana and Uttar Pradesh, 10 million tonne has to be transported to other consumer states.
In April, the food ministry had imposed a nominal value cut on wheat procured under relaxed specifications, so that ‘separate marking and stocking of such stock and its utilisation on priority could be ensured’. However, subsequently the Centre decided to bear the cost of value cut.
The purpose of relaxing norms was to ensure that farmers in key wheat growing states such as Haryana, Madhya Pradesh, Rajasthan, Gujarat and Uttar Pradesh could get the entire MSP for the wheat sold to FCI and state-owned agencies, irrespective of quality.
FCI had a wheat stock of 38.6 million tonne on July 1 while the buffer norm stipulates only 27.5 million tonne of grain to be held with the government agencies at the start of a month.
This year, Punjab, which had contributed more than 11.6 million tonne wheat to the central pool last year, has contributed 10.3 million tonne this year’s marketing season. Haryana, a key contributor to the central grain pool, has purchased 6.7 million tonne of grain from farmers.
Madhya Pradesh, which carries out its own procurement on behalf of FCI, has purchased 7.3 million tonne of grain which is marginally higher than previous year.
