SPEECH OF PROF. K.V. THOMAS, HON’BLE MINISTER OF STATE (I/C) CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION

Food Ministers of the States, Union Food Secretary, Food Secretaries of States and other officers of the Government of India and States.

Due to efforts of farmers of the country, the wheat production during this year has been an all-time record of 842 lakh tonnes. Wheat procurement during this year has reached an all-time record of over 280 lakh tonnes.

2. Stock position of wheat and rice in Central Pool as on 01.06.2011 reached an all time high level of 654.73 lakh tonnes. As on 1.7.2011, the combined stock position of wheat and rice was 640.06 lakh tonnes, comprising of 371.49 lakh tonnes of wheat and 268.57 lakh tonnes of rice against combined buffer norm of 319 lakh tonnes as on 1st July. The availability as on 1st July last year was 578.5 lakh tonnes of foodgrains in the Central Pool.

3. The Central Pool stocks as on 1.6.2011 were highest ever recorded level of stocks. The last time when we had similar high stock was 647.18 tonnes as on 1st July, 2002

A good monsoon, adequate MSP and bonus given by the Government of India for both wheat and rice over the last several years, and even additional bonus announced by some of the State Governments have contributed to such a high level of stocks this year.
4. Most of the wheat-procuring States have shown considerably improved performance during the Rabi Marketing Season 2011-12. Madhya Pradesh procured about 49 lakh tonnes of wheat against 35 lakh tonnes procured last year; Uttar Pradesh procured about 34.5 lakh tonnes of wheat against 16.5 lakh tonnes last year; while Rajasthan procured 13 lakh tonnes against 4.75 lakh tonnes last year. Punjab and Haryana also have shown higher procurement levels compared to last year. Effort of these States in increasing procurement and contributing to Central Pool need to be complimented.
5. Similarly, rice procurement also this year has been quite impressive and during the on-going Kharif Marketing Season 2010-11, rice procurement has already touched 321 lakh tonnes and is expected to reach about 330 lakh tonnes. Andhra Pradesh has procured 85.61 lakh tonnes against 75.5 lakh tonnes procured last year.
6. While we are at a very comfortable situation as far as foodgrains are concerned, this has lead to some issues regarding proper storage and safe upkeep of these stocks.
Government is fully aware of the gravity of the situation and is taking all possible measure to deal with the situation.

7. Due to current high level of stocks of foodgrains in the Central Pool, in addition to normal annual allocations of foodgrains under TPDS and other welfare schemes, the Government has allocated an additional quantity of 50 lakh tonnes of foodgrains for BPL families in the month of May and another 50 lakh tonnes of foodgrains for APL families in the month of June. Another 50 lakh tonnes of foodgrains will be allocated shortly for 150 poorer districts, as mandated by the Hon’ble Supreme Court, modalities of which are being worked out.

8. The Government of India has been continuously monitoring the lifting by State Governments and is also considering lump-sum allocation for 3 – 6 months at a time for distribution to the targeted groups.

This will help in faster evacuation of stocks from the Central Pool, particularly in States which have seen much higher level of procurement of wheat than was earlier expected, e.g., Punjab, Haryana, Madhya Pradesh, Rajasthan and Uttar Pradesh.

9. Instructions have also been given to FCI that FCI depots in various States should have adequate quantity of stocks for being utilized by the State Governments. For this purpose, optimum movement of foodgrains to different States, particularly to the deficit States is being ensured.

10. We are in the process of finalizing the National Food Security Bill, draft of which is likely to be placed before the Parliament soon. Once the National Food Security law is enacted, there will be increased responsibility on part of both Central and State Governments to ensure that legal entitlements of food for different categories of beneficiaries under the Act are met. One of the important issues is the likely increase in requirement of foodgrains for implementing entitlements under the proposed Act. It is, therefore, necessary that all the procuring States, especially the newly emerging procuring States, particularly in Eastern India step up their efforts to increase procurement.

11. The Government has recently allowed export of 10 lakh tonnes of non-basmati rice on private account due to rice stocks being in comfortable position and increased procurement of rice during the on-going Kharif Marketing Season 2010-11. This decision of Government will help farmers in rice-producing States in getting remunerative price for their produce and will also ease up pressure on the Government procurement and storage.

12. Government is taking all necessary steps to ensure that stocks are safely kept and proper quality control measures are taken for the same. State Governments are also requested to issue suitable instructions for safe upkeep of stocks. FCI has also been directed to hire as much additional godown space from private sources as possible to supplement its efforts for proper storage of foodgrains.

13. The Central Government is taking requisite steps to create new additional covered storage capacity of more than 152.97 lakh MTs across 19 States under the Private Entrepreneur Guarantee (PEG) Scheme with the help of private entrepreneurs, CWC and SWC with a 10-year guarantee by FCI.

Out of the sanctioned capacity of 152.97 lakh tonnes, 72.65 lakh tonnes has already been sanctioned by High Level Committee of FCI. This includes 52.31 lakh tonnes sanctioned to private entrepreneurs under the scheme and 20.34 lakh tonnes has been sanctioned to CWC and SWCs. Of the sanctioned capacities, a capacity of 3.38 lakh tonnes has already been constructed and handed over by CWC/SWCs, while 5.35 lakh tonnes is under construction by them. It is expected that about 40 lakh tonnes of new capacities under the scheme will be available my March 2012.

14. The State Governments may introduce similar guarantee scheme for their own storage needs through similar PPP model. Creation of intermediate storage capacity by the State Governments will help in faster lifting of stocks for the quantities of foodgrains allotted to them and will ensure speedier distribution to the targeted population in these States. Creation of additional capacities at District, Sub-Divisional, Block and Gram Panchayat levels by the State Governments should be possible by sourcing funds from various developmental schemes. For larger storage capacities, the State Governments could also utilize funding from NABARD under RIDF scheme of Government of India by according necessary guarantees required by NABARD under RIDF scheme. The additional capacities, thus, created by State Governments will also assist in increasing procurement, particularly in States which have potential for increasing procurement, especially in the Eastern States of the country.

15. An additional new capacity of 5.4 lakh tonnes is proposed to be created in the North Eastern States by Government of India under a special plan scheme. This will ensure that at least four months’ stocks are kept in North Eastern States at any point of time.

16. There is an ambitious programme for the revamping of PDS system currently on the anvil. The computerization of Public Distribution Data and making the PDS data ADHAR compatible are already afoot in various States. States like Chhattisgarh, Andhra Pradesh, Maharashtra are going ahead in this regard. There is a need for all State Governments to adopt similar computerization models for their States.

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