Answer:

Introduction:

Stocking of Food Grains being implemented by the Food Corporation of India (FCI) was first introduced in India in 1969 during the 4th Five-year plan period. Recently buffer stock was in news in relation to onion, tomato, wheat, & rice; so as to stabilize the prices of staple food at times of fluctuating supply and case of shortages through government-maintained reserves.          

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Prevalent Issues associated with the management of buffer stocks

• Damaged Stock: According to the CAG report, 1.06 lakh metric tonnes of foodgrains worth Rs 121.93 crore were damaged due to FCI’s failure to adhere to the first-in-first-out principle from 2006-07 to 2011-12.
• Unwanted Expenditure: FCI incurred an additional Rs 376 crore in unwanted expenditure over the same period, indicating a lack of fiscal discipline and operational oversight.
• Rising Operational Costs: Mandi fees, MSP hikes, bonuses, and administrative expenses swell the Food Corporation of India’s (FCI) economic cost of food grain management. The costs are about 40% higher than procurement prices, affecting overall efficiency.
• Pest Infestation and Spoilage: Due to poor storage conditions, significant quantities of grains are lost to pest infestations. In 2019, FCI reported a loss of around 62,000 metric tonnes of wheat due to pests.
• Quality Degradation: Reports from the Commission for Agricultural Costs and Prices have pointed out the nutritional quality degradation of grains in prolonged storage, impacting market value and consumer health.
• Corruption and Diversion: Instances like the 2012 Bihar food grain scam reveal the vulnerability of buffer stocks to diversion and corruption.
• Natural Calamities and Climate Change: Climate change impacts, like unexpected flooding, have affected buffer stock quality, as seen in the 2018 Kerala floods, which damaged stored grains.

Wys to optimise storage, prevent wastage, and ensure efficient distribution 

Strategies to Optimise Storage

• Decentralised Procurement: The Shanta Kumar Committee’s suggestion to decentralised procurement operations aligns with the successful models in states like Odisha and Chhattisgarh. It would mean states with a surplus can directly contribute to the central pool, reducing transit time and storage pressure on FCI.
• Involving Private Sector: By incorporating the Private Entrepreneur Guarantee (PEG) scheme and private entities in stocking operations, alongside Central Warehousing Corporation (CWC) and State Warehousing Corporations (SWC), storage can be optimised through better infrastructure and reduced overhead costs.
• Negotiable Warehouse Receipt (NWR) System: Encouraging the NWR system would allow farmers to store their produce in certified warehouses, making storage more systematic and reducing the pressure on FCI godowns, thus optimising storage capacity.
• Leveraging Technology: Implementation of technologies like blockchain for inventory management can streamline stock levels, improve transparency, and optimise the use of available storage space, preventing overstocking and underutilization.

Strategies to Prevent Wastage

• Transparent Liquidation Policy: An automated policy, as recommended by Shanta Kumar committee, to liquidate surplus stocks would prevent the rotting of grains in godowns. The excess stock can be offloaded in the open market or used for exports, preventing wastage.
• Quality Control Mechanisms: Regular quality checks and a dynamic approach towards stock maintenance would help in early detection of spoilage risks, allowing timely interventions and reducing wastage.
• Improved Infrastructure: Upgrading storage facilities with better ventilation, moisture control, and rodent-proofing will significantly bring down the loss percentage that currently exists due to poor storage conditions.
• Robust Monitoring Systems: The use of sensors and IoT devices for real-time monitoring can help in maintaining the quality of the stored grains by providing alerts on environmental changes that could lead to wastage.

Strategies to Ensure Efficient Distribution

• Outsourcing Last-Mile Distribution: Engaging the network of self-help groups and Farmer Producer Organizations (FPOs) in the distribution network would ensure that food aid reaches the most remote areas efficiently.
• Direct Benefit Transfer (DBT): Implementing the DBT system as suggested would streamline subsidies, reduce pilferage, and ensure that the benefits reach the intended beneficiaries directly and timely.
• Restructuring FCI’s Role: FCI’s redefined role would concentrate on need-based procurement, especially from states with insufficient procurement infrastructure such as eastern and north-eastern states, thus ensuring that grains are distributed efficiently from surplus to deficit regions.

Conclusion

By implementing targeted reforms and embracing technological innovations, India can transform its buffer stock management into a more efficient and responsive system, ensuring food security, reducing wastage, and supporting the agricultural sector’s growth and sustainability.