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'Decentralised procurement to benefit states'

Union Consumer Affairs and Food Minister Shanta Kumar on Saturday defended the proposal for decentralised procurement of foodgrains. He said that it would benefit farmers and consumers and the Rs 20 billion thus saved by the government would be passed on to the states as subsidy.

The difference between the economic cost and the central issue price would be given as subsidy to the states, he told reporters.

The experiment had proved to be a great success in Madhya Pradesh, Uttar Pradesh and West Bengal where the Food Corporation of India saved Rs 1.40 billion, he said.

A ministerial group had been constituted under the chairmanship of Union Finance Minister Yashwant Sinha for restoring balance in food production and streamlining the procurement and public distribution system, he informed.

He said there was resistance from the states to the new procurement system bus trying to forge a consensus on the issue.

Kumar said that the government was facing the problem of plenty in foodgrains production with a stock of 60.8 million tones, while there was a shortfall in production of oilseeds and pulses necessitating the import of oil last year.

He said that import of oils, oilseeds and pulses cost Rs 100 billion to the government last year which underlined the need for urgent steps to increase production of oilseeds and pulses.

He said that various steps were being taken to encourage the farmers to shift to oilseed and pulses cultivation and a ministerial group was also looking into the issue.

Kumar said that the government had chalked out a comprehensive plan to clear the foodgrain stocks by preparing special schemes for the supply of subsidised foodgrains to below poverty line families, food for work, green India project, drought relief, Annapurna Yojana and mid-day meal scheme besides encouraging exports.

He said that he had issued orders to dispose of the entire stock which was more than three years' old and convert the stock which was not fit for human consumption into cattle feed and supply it free or at nominal rates to the states, especially the drought-hit areas.

The government had released 14.4 million tonnes for distribution to below poverty line families at subsidized cost, 2.5 million tonnes for free mid-day meal, 1.6 million tonnes to state under food for work programme at 50 per cent subsidy, besides allotment under Annapurna Yojana and other schemes.

He said that the states were not ready to lift the foodgrains at 50 per cent subsidy under food for work programme and the matter regarding further subsidising the foodgrains or supplying these free was under consideration of the government.

He said that the government exported 2.8 million tonnes of wheat against a target of 2 million tonnes last year and not a grain of wheat exported through the government was rejected.

Kumar said that the wheat rejected by Iraq was supplied by private exporters and it was rejected because the standards fixed by Iraq were more stringent than the international standards and the permissible inorganic foreign substance limit was zero per cent against the international standard of 0.5 per cent.

The government had seta target to export 5 million tonnes of wheat and 3 million tonnes of rice this year. He said that the government was spending Rs 320 billion on subsidies in foodgrain sector.

He said that the Reserve Bank of India would fix limit against stocks to enable the states to have liquidity for procurement on the same pattern it was doing for the FCI.

He said that the public distribution system with a network of 460,000 fair price shops could not be privatised and the government had given the powers for social control of these institutions to make it more effective.

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