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Should India worry about shrinking foodgrain reserves?


What is the rationale for buffer stocks?

Buffer stocks are often maintained for essential commodities such as wheat, rice, and legumes to provide food security through the public distribution system and to ensure that adequate wages are accessible to everyone. real to live. It also ensures no food shortages during emergencies like droughts and floods, and helps the government run its welfare programs. They also help the government facilitate and maintain price stability and keep food inflation low. In the event that food prices rise due to poor market supply, the government will release buffer stocks to reduce prices.

How does the buffer storage system work?

Buffer reserves include operational reserves to meet monthly distribution requirements under Targeted Public Distribution and other welfare programs) and food security reserves to meet procurement needs shortage. Procurement (with minimal support), storage and distribution of wheat and paddy is undertaken by Food Corporation of India, while coarse grains are procured by state government agencies. In addition to its own storage capacity, FCI also leases storage capacity from Central Logistics Corporation, State-owned Logistics Corporations, public agencies and private entities.

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What are the trends in India’s buffer stocks?

Our buffer stocks have exceeded the required level. In April, the required buffer stock for wheat was 7.6 million tons (ton), while the actual FCI stock was 18.99 million tons. The surplus is used for the free grain program during the pandemic. However, such distributions and higher global wheat prices are beginning to deplete the wheat buffer.

How have buffer stocks helped during covid times?

As millions of people lost their livelihood during the shutdown period and after, the central government decided to provide 5kg of free food grains per person and 1kg of free whole grains per family . The plan, originally intended for three months, continues to this day. This food subsidy program was adopted to expand the food security net and prevent potential hunger. In a way, this is the right way to use leftover grains that would otherwise go to waste.

What does cache depletion signal?

The Russo-Ukrainian War raised international grain prices, prompting farmers to sell their produce to private traders for export, leading to a decrease in buffer stocks. As a result, the government may not be able to afford to continue the free grain program. Depleting buffer stocks can also put a strain on the public distribution system. In addition, limited buffer stocks will limit the ability of food grains to stabilize prices, at a time when food inflation is on the rise.

Jagadish Shettigar and Pooja Misra are instructors of BIMTECH

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