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No stemming the rot

india Updated: Oct 14, 2011 15:02 IST
Gurpreet Singh Nibber
Gurpreet Singh Nibber
Hindustan Times
Highlight Story

It was during last year’s kharif procurement — September to October — that the Central government faced acute embarrassment and the Supreme Court’s wrath over food grains rotting in open storage. One would have expected things to improve by now.

No. It has been more than six months since, and there has only been a marginal increase of 3 lakh tonne in the total storage — covered and open — available for food grains in Punjab. The total today, stands at 200 lakh tonne.

As of date, the storage already in use or earmarked is 138 lakh tonne, while 110 lakh tonne more is expected from the latest bumper wheat crop currently being procured. The state, thus, will soon have 48 lakh tonne of food grain on its hands, for which it will not have space even in the open.

There is 52 lakh tonne of wheat from last year still waiting to be removed from the state, of which two-thirds (34 lakh tonne) is on open plinths, at the mercy of weather gods. The responsibility of shifting the stored food grain out of Punjab to the consumer states lies with the Food Corporation of India (FCI), on behalf of which various state agencies do the procurement.

All storage is also, thus, created on behalf of the FCI only. In 2008, a survey by the FCI found that Punjab needed 71 lakh tonne of additional covered space for proper storage of food grains. However, in the three years since, the central government’s premium food procurement agency has managed to add only 4.57 lakh tonne of covered storage in Punjab.

Even that is yet to be finalised.

While the requirement was assessed at 71 lakh tonne, the FCI had floated tenders only for 50 lakh tonne. Proposals came in for 101 lakh tonne, of which tenders for only 4.57 lakh tonne were cleared by an FCI panel headed by chairman-cum-managing director Shiraj Hussain. The rates quoted for the rest were found to be too high.

Explaining the failure to hire more storage, Punjab’s secretary, food and civil supplies, DS Grewal, told HT, “The rates being offered by the FCI are too low — only about Rs 5 per quintal per month — despite the fact the land prices have touched Rs 50 lakh per acre even in the remote districts.” The tenders had demanded up to Rs 11.

To make it more attractive now, the present guarantee of taking the storage on rent for seven years is being extended to 10 years. Over the past 10 years, the covered storage space has increased by a mere 19 lakh tonne, the total today being 96.25 lakh tonne (103.41 lakh tonne is in open).

For the FCI, it is a matter of utilising its meagre resources equitably. Of the total storage available countrywide, Punjab has been allotted capacity in proportion to the food grain it contributes to the national pool — 42% of wheat and 30% rice. Thus, out of the 610 lakh tonne total storage the FCI has, Punjab has been given 200 lakh tonne. Every year, 336 lakh tonne rice and 258 lakh tonne wheat is procured for the national pool.

Fewer takers

With none of the mathematics adding up to any greater shelter for the wheat crop soon set to flood the procurement agencies, state food officials are having sleepless nights. One of the reasons is Punjab is accountable for all the grain that is lost on any account, even as it stocks it on the FCI’s behalf.

The biggest charge against the FCI is its failure to move the food grain out of Punjab. However, FCI deputy general manager Aseem Chhabra does not agree. He says stocks are being moved out every day, as per the requirement of the consuming states — Jammu and Kashmir, Himachal, Maharashtra, Tamil Nadu, Gujarat and Assam. The total demand, however, has gone down.

Chhabra says till a few years ago, Madhya Pradesh, Orrisa and West Bengal were also consuming states, but have now become self-sufficient. “Bumper crops of wheat and rice for the past three years, plus a ban on their export have also added to the need for more storage,” he added.

Punjab not on list for silos

The central government plans to build steel silos to store a total of 20 lakh tonne of food grain, but Punjab does not figure on the list of states that will get those. The Food Corporation of India, according to sources, will build the silos in the “consuming states”. Punjab, meanwhile, has put in its demand for the silos at various levels in the union food ministry.