Problems and issues of storage, procurement, distribution, import and export of food

Storage

The agricultural sector in India accounts for about 14% of GDP and 10% of export earnings. India’s arable land area of 159.7 million hectares (394.6 million acres) is the second largest in the world, after the USA. Its gross irrigated crop area of 82.6 million hectares 9215.6 million acres) is the largest in the world. It ranks among the top three global producers of many crops like wheat, rice, pulses, cotton, peanuts, fruits and vegetables. In spite of these achievements, the crop yields in India are still around just 30% to 60% of the best sustainable crop yields achievable in the farms of developed countries. These are likely to be negated in the coming decades due to scientific and technologically improved crop production measures which would increase the quantity of food grains harvested and therefore the storage requirement would further increase. About 65-70% of the total food grains produced in India is retained by farmers for their selfconsumption or meeting their other financial requirements. The food grains at farm level are stored in traditional as well as in modern storage structures.Food grains are stored in bulk in these storage structures, which are neither rodent proof nor moisture proof. There are estimates that substantial quantity of food grains (about 6.0% to 10% of total production) are damaged in these storage receptacles due to moisture, insects, rodents and fungi and also due to transportation.

It has been estimated that about 65% of their total produce are held by the farmers for their consumption and use which is stored in a crude and unscientific method. The balance quantity is supplied to the central pool and delivered at the nominated warehouse or at the local mandi earmarked for procurement or delivery. The procurement agency collects the quantity deposited to the central pool by the farmer and transports the same to the FCI or nominated warehouse. Often the stock stored in the warehouses remain in storage for more than its shelf life due to want of off-take of stock by allotees like Targeted public distribution system (TPDS) and flour mill owners. Such long storage, if not taken proper care of, causes damage to the stock. Since the stock stored in the warehouse is not lifted, the storage space cannot be utilized for fresh arrivals of the ensuing season.

Challenges of storage facility in india

Storage of food grains in open space

Normally storage in open in the form of CAP is supposed to be resorted to during peak procurement seasons. The storage in the CAP should not be more than a year with at least one turn-over of the stock every 6 months to retain the quality of the food grains. Further, for proper aeration, the cover is to be removed at least 2 to 3 times in a week. Unfortunately, lot of stock is lying in the open where even the plinths are not available. During procurement season, for want of adequate CAP storage facilities, stocks are simply dumped/stacked on open spaces wherever feasible and much of these stock gets damaged because of seepage of water from the ground in the absence of proper plinth or height of ground or due to floods and rains.

Poor condition of storage facilities

Utter disregard to safe and scientific storage practices have resulted in excessive damages to food grains in the central pool maintained by SGAs in various states of india. In addition, failure to ensure early disposal of damaged stock led to blockage of storage space. The loss due to damaged stock is in million tones.

Efficient capacity utilization

For optimum capacity utilization of the existing capacity, timely and proper planning of movement and distribution of food grains across pan India is a pre-requisite. Despite storage constraints in FCI, the utilization of existing storage capacity in various states/UTs was less than 75% in majority of the months during the period 2011-12-2016-17. However, the capacity utilization may not be optimal due to reasons of sudden unanticipated increase in offtake for a particular region or due to unanticipated decrease in procurement.

Following important steps sgould be taken in order to boost the storage facilities:

With proper foresight and planning in lifting the stock of the central pool in time from SGAs,money paid as hiring charges and carry over charges to SGAs can be utilized for construction of new storage spaces.
Adequate manpower and supervision is required for scientific and safe storage in CAP storage.
To save costs, proper plinths should be constructed in vacant government lands which can be used for temporary storage of food grains during peak procurement seasons.
Hiring charges of FCI would continue to shoot up substantially in future unless owned storage capacity is augmented proportionately as against creation of storage capacity for guaranteed hiring by FCI.
Poor and reckless management and cumbersome paperwork leading to non-availability of storage space even if the space is held by damaged stock for want of disposal approvals from FCI should be dealt with appropriately by decentralized decision making.
Non adherence of safe and scientific storage methods should be dealt with an iron hand and the strictest ofü punishment is to be enforced and accountability fixed.
The total number of covered storage required for meeting the deficiency of 35 million MT is 7000 godowns at the rate of 5000 tonnes per godown. At approximately 1,450 INR21 per tonne requirement of funds for the godowns, the total funds requirement at current rates for constructing 7000 numbers of covered storage is 5,075 Cr INR excluding the cost of land.

The public distribution system (PDS) has played an important role in attaining higher levels of the household food security and completely eliminating the threats of famines from the face of the country, it will be in the fitness of things that its evolution, working and efficacy are examined in some details.

PDS was initiated as a deliberate social policy of the government with the objectives of:

i) Providing foodgrains and other essential items to vulnerable sections of the society at resonable (subsidised) prices;

ii) to have a moderating influence on the open market prices of cereals, the distribution of which constitutes a fairly big share of the total marketable surplus; and

iii) to attempt socialisation in the matter of distribution of essential commodities.

The focus of the Targeted Public Distribution System (TPDS) is on “poor in all areas” and TPDS involves issue of 35 Kg of food grains per family per month for the population Below Poverty Line (BPL) at specially subsidized prices. The TPDS requires the states to Formulate and implement :-

foolproof arrangements for identification of poor,
Effective delivery of food grains to Fair Price Shops (FPSs)
Its distribution in a transparent and accountable manner at the FPS level.

India is the third largest producer of cereals, with only China and the USA ahead of it. India occupies the first position in milk production and is the third largest producer of fish and second largest producer of inland fisheries in the world. According to ministry of Agriculture ,India is likely to produce a record 273.38 million tonnes of food grains 2016/17, slightly higher than the previous estimate of 271.98 million tonnes.

Economic growth is typically accompanied by improvements in a country’s food supply, both quantitative and qualitative, and a gradual reduction in nutritional deficiencies. It also brings about changes in the production, processing, distribution and marketing of food. Diets evolve over time and are influenced by factors such as income, prices, individual preferences and beliefs, cultural traditions, as well as geographical, environmental, social and economic factors.

India faces a greater food challenge – having only 2.3 per cent share in world’s total land area it has to ensure food security to about 17.5 per cent of the world’s population. Total foodgrain production is estimated at an all-time high of 272 million tonnes in 2016-17, 8% higher than the 251.6 million tonnes last year, and surpassing the previous record of 265 million tonnes in 2013-14.

Wheat production is estimated to rise by 4.7% to 96.6 million tonnes in 2016-17 (compared to 92.3 million tonnes in 2015-16),

Production of pulses is likely to rise 35% from 16.4 million tonnes last year to 22.1 million tonnes in 2016-17.

Production of rice, the most popular staple, is estimated to increase by over 2 million tonnes, from 104.4 million tonnes last year to 106.7 million tonnes in 2016-17.

As per 2^nd Advance Estimates, the estimated production of major crops during 2016-17 is as under:

Foodgrains – 271.98 million tonnes (record)

Rice – 108.86 million tonnes (record)
Wheat – 96.64 million tonnes (record)
Coarse Cereals – 44.34 million tonnes (record)
Maize – 26.15 million tonnes (record)
Pulses – 22.14 million tonnes (record)
Gram – 9.12 million tonnes
Tur – 4.23 million tonnes (record)
Urad – 2.89 million tonnes (record)

Oilseeds – 33.60 million tonnes (record)

Soyabean – 14.13 million tonnes
Groundnut – 8.47 million tonnes
Castorseed – 1.74 million tonnes

Cotton – 32.51 million bales (of 170 kg each)

Sugarcane – 309.98 million tonnes

Benefiting from the green revolution technologies introduced in 1965-66, the per capita net availability of foodgrains per annum in India increased from 144.1 kg per capita per year in 1951 to a peak of 186.2 kg per capita per year in 1991. Post-1990s though, there is a clear decline in the per capita foodgrain availability which has declined to 160.1 kg per capita per year in 2010.

Since agricultural growth is limited, imports can help improve the country’s supply situation for a short term. But for the long term, the country will need to focus on productivity enhancement, through public investment in irrigation, research and efficient use of water, plant nutrition and other inputs.

Import and Export Division undertakes the work of Export and Import of foodgrains as per the guidelines, policy and instructions of Government of India.

Functions of Import Export Division

Import and Export of food grains (mainly Wheat and Rice) and issue of stocks under various schemes of World Food Program/ Government aid on donation basis to other countries.
Assisting the Ministry of CAF&PD in formulation of policies regarding import and export of wheat and rice. Formulating guidelines/procedures to be followed in import/export of foodgrains in accordance with policy decision of Government Of India and forwarding the same to all concerned field offices for necessary compliance.
Maintaining liaison with concerned agencies like STC, MMTC, PEC, Railways, Ministry of shipping and Port trusts etc. prior, during and post import/export operations.

In FY19, exports of agricultural and processed food products totalled US$ 38.49 billion. During the period, top five exported commodities were marine products (US$ 6.80 billion), basmati rice (US$ 4.71 billion), buffalo meat (US$ 3.59 billion), spices (US$ 3.31 billion) and non-basmati rice (US$ 3.00 billion).

Indian agricultural/horticultural and processed foods are exported to more than 100 countries/regions; chief among them are the Middle East, Southeast Asia, SAARC countries, the EU and the US.

Ministry of Commerce & Industry is planning to introduce an “Agriculture Export Policy” which will aim at doubling the agricultural exports from the country and integrating Indian farmers and agricultural products to the global value chain.The Agricultural and Processed Food Products Export Development Authority (APEDA) plays a significant role in tapping India’s agricultural strengths and works towards expanding the export potential of Indian agricultural and food products.

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