A worker carries a ladder past sacks filled with wheat at a Food Corporation of India (FCI) warehouse in Morinda in Punjab. (REUTERS)
A worker carries a ladder past sacks filled with wheat at a Food Corporation of India (FCI) warehouse in Morinda in Punjab. (REUTERS)

FCI turns to tech to shield its procurement system from fraudsters

The “open-ended” procurement process also makes the system vulnerable to scams. It is easy for unscrupulous traders to game the system by selling rice already sold to FCI during previous seasons
By Zia Haq
PUBLISHED ON MAR 26, 2021 03:24 PM IST

During the 2020 kharif, or summer-sown season, food bowl Punjab’s paddy output stood at nearly 18.1 million tonnes. The Food Corporation of India (FCI), the state-run food-stocking agency responsible for procuring grains from farmers at support prices, ended up buying 20.3 million tonnes of paddy from the state, or 11% more than the state produced.

Procurement, which refers to the government’s buying of farm produce at assured prices, is an “open-ended” process. This means FCI has to buy all produce farmers and traders bring to its procurement centres.

This “open-ended” procurement process also makes the system vulnerable to scams. It is easy for unscrupulous traders to game the system by selling rice already sold to FCI during previous seasons.

In states such as Punjab and Haryana, where the agricultural produce market committees’ procurement yards are within reach of every farmer, the stocks procured by the state’s agencies are transferred to rice mills where they are milled over the next five months. After the paddy is milled, the rice is handed over to FCI. The agency stores it in its own or hired silos.

Also Read | Govt procures paddy worth 1.06 lakh crore so far this kharif season

Frequently, traders buy foodgrains at lower than government-assured prices from poorer states such as Bihar, transport the produce to Punjab and Haryana, where the procurement system is robust, and profit from it. These are the likely reasons why FCI ended up buying more paddy from Punjab than the state actually produced last year.

To prevent such practices, which bloats the government’s food subsidy bill, the government is turning to technology. FCI will soon introduce gadgets at its procurement centres that will show the “age of rice”. It is part of a proposed national programme to detect old rice being recirculated and resold to FCI by middlemen and traders who hoard rice.

“Rice-age testing is already on in Andhra Pradesh. Its successful implementation there means that the FCI will roll it out across the country, mainly in procurement-heavy states,” said food secretary Sudhangshu Pandey.

The gadgets being used in Andhra Pradesh to detect rice age involves pouring certain chemicals on a sample of rice. If the rice is freshly milled, then it turns to a certain colour that indicates it has been freshly harvested.

FCI has also come out with a draft proposal to change the quality norms that apply to rice and wheat bought by it, according to a copy of the proposal seen by the HT, which could limit the total quantity of foodgrains procured by the agency.

The agency’s draft proposal recommends that only wheat with a moisture content of 12% or less will be fit for procurement, down from 14% currently. Similarly, the agency has proposed reducing the permissible limit of “foreign matter” in rice it procures to 1% from 2% currently.

FCI’s draft proposal says the changes are necessary to meet international standards of foodgrains for easy export.

“However, it can adversely impact costs of farmers, who need to ensure proper post-harvest processing to meet higher standards of procurement,” said RN Mani, an agro-economist formerly with Tamil Nadu Agricultural University.

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