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Subject: General Studies (Paper 3 - Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management)

Topic: Issues of Buffer Stocks and Food Security

 Issues of Buffer Stocks and Food Security

Buffer stocks

The Food Corporation of India is the main agency for procurement, storage and distribution of food grains. In addition to the requirements of wheat and rice under the Targeted PDS, the Central Pool is required to have sufficient stocks of these in order to meet any emergencies like drought/failures of crop, as well as to enable open market intervention in case of price rise.

What are Buffer Norms?

The Buffer norms are the minimum food grains the Centre should have in the Central pool at the beginning of each quarter to meet requirement of public distribution system and other welfare measures.

Objectives of Buffer Stocks:

The buffer stocks are required to Feed TPDS and other welfare schemes, Ensure food security during the periods when production is short of normal demand during bad agricultural years Stabilize prices during period of production shortfall through open market sales.

The FCI has been constructing storage capacity for holding buffer and operational stocks of food grains at nodal points in the country. The storage capacities available with FCI are mainly used for storage of food grains and partly for other commodities and general warehousing.

Any changes in the Buffer Norms in pipeline?

Yes, with the bulging procurement as well as the demand, the government had asked the National Centre for Agricultural Economics and Policy Research (NCAP) to study the buffer norm and make recommendation on increasing it if the demand has gone up. A technical group was also studying the report of NCAP.

The government is reviewing the norms for keeping buffer stocks of wheat and rice required at a particular time of the year to feed the public distribution system and welfare schemes.

The demand for wheat and rice distributed through welfare schemes is expected to rise with the implementation of the food security law.

The government was looking at three issues which would determine the buffer norms.

"The government's role in procurement and marketing of the grains, protecting the farmer's interest by setting a minimum support price and the subsidy we are giving to private traders for bulk purchase under the Open Market sale Scheme (OMSS)," . Buffer norms for wheat and rice have not been revised since April 2005.

According to the norm, the minimum quantity of grains available with the government should be 4 million tonne (mt) of wheat and 12.2 mt rice on April 1 every year. But as on April 1 this year, the Food Corporation of India (FCI) was holding 24.2 mt wheat and 35.5 mt rice.

The government anticipates that by July1, stock holding of grains will touch 93 mt including wheat stocks at 60 mt.

"The government had kept buffer norms at a time when grain production in the country was low, which is not the situation now. As per our projection till 2040, we will have grain (wheat and rice) production touching 253.24 mt compared to the 2013-14 projection of 192.02 mt,".

According to FCI officials, the expenditure incurred by the government on holding one lakh tonne wheat per annum was 25 crore and 32 crore for rice.

"It is high time that the country evaluated how much buffer stock we need and liquidate excessive stock. This will tame food inflation, reduce food subsidy and bring rationalisation to grain market," said Ashok Gulati , chairman, CACP.

The National Centre for Agricultural Economics and Policy Research (NCAP) has submitted its recommendations on buffer norms a few months ago. "We feel that buffer norms have to increase with rising production and population," said Ramesh Chand, director, NCAP. He said the Food Security Act will now ensure that the government will need around 64 million tonne wheat for the scheme as against 56 million tonne currently required to run the public distribution system.

Food security

Food security is a condition related to the ongoing availability of food. Concerns over food security have existed throughout history. Yet it was only at the 1974 World Food Conference that the term 'food security' was established as a formal concept. Originally, food security was understood to apply at the national level, with a state being food secure when there was sufficient food to "sustain a steady expansion of food consumption and to offset fluctuations in production and prices".

A new definition emerged at 1996 World Food Summit; this time with the emphasis being on individuals enjoying food security, rather than the nation. According to the Food and Agriculture Organization (FAO), food security "exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life".

Food Security is determined by the availability of food, the access to food and the absorption (or nutrition) of food in the system. These three conditionalities for food security are closely inter-related and thus availability and access to food can increase absorption or nutritional levels among the households.

It is seen that in spite of India having achieved self sufficiency in cereals it is still lagging behind in the production of pulses and oilseeds. It is also observed that there has been a significant increase in the production of fruits, vegetables, dairy products, meat, poultry and fishery products. However per capita availability of these are still far lower than international and national norms and standards. The trends in availability appear not to be improving as required solely on account of the stagnation of the agricultural sector. An attempt has been thus made to identify the major constraints and deficiencies in agricultural growth and specific suggestions have been put forward for improving the performance of the agricultural sector and to enhance the growth rate so that it is capable of meeting the food and nutritional requirement that have been projected in the next decade. Among the specific suggestions made to lift the agricultural sector from its present slowdown and stagnation, we have highlighted increased public investment and a serious review of subsidies provided to farmers. To boost infrastructure, expansion of credit, and essential inputs, land and water management, agricultural research and extension, effective marketing and price policies, the diversification of agriculture, the strengthening of institutions catering to these needs, strengthening the mitigation strategies for tackling climate change, and the strict regulation of land use and diversion of land for nonagricultural activities.

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