Food Corporation of India (FCI): Role and Challenges

Food Corporation of India (FCI)

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Context

The government has increased the authorised capital of Food Corporation of India (FCI) from Rs 10,000 crore to Rs 21,000 crore through a notification. This move will help FCI reduce its borrowings from banks and save approximately Rs 750 crore annually. FCI is responsible for procurement of foodgrains from farmers, stocking and distribution under the PDS.

Food Corporation of India (FCI)

The Food Corporation of India (FCI) is a statutory body under the Ministry of Consumer Affairs, Food and Public Distribution, Government of India.

Establishment: FCI was established in 1965 under the Food Corporations Act, 1964, to implement the food policy of the Government of India.
Mandate: FCI's primary role is to ensure food security and stabilize food grains prices for the public distribution system (PDS). It procures, stores, and distributes food grains across the country.

Functions:

Procurement: FCI procures food grains (mainly rice and wheat) from farmers at Minimum Support Price (MSP) to support farmers and maintain buffer stocks.
Storage: FCI stores food grains in various warehouses across the country to ensure their availability during emergencies or for distribution through PDS.
Distribution: FCI distributes food grains to various states and union territories for PDS, welfare schemes, and other programs.
Price Stabilization: FCI helps stabilize prices by releasing food grains from its buffer stocks when there is a shortage in the market.

Organizational Structure: FCI is divided into five zonal offices and 24 regional offices to manage its operations efficiently.
Buffer Stocks: FCI maintains buffer stocks of food grains to meet emergency requirements, stabilize prices, and ensure food security.
Challenges: FCI faces challenges such as inefficiencies in procurement and distribution, storage losses, and ensuring timely delivery of food grains.
Reforms: The government has initiated reforms in FCI to improve its efficiency, including the introduction of technology in procurement and distribution, reduction of food grain losses, and better targeting of beneficiaries.

PRACTICE QUESTION

Question: Which of the following statements about the Food Corporation of India (FCI) is/are correct?

1.FCI was established in 1965 under the Food Corporations Act, 1964.

2.FCI is responsible for the procurement, storage, and distribution of food grains in India.

3.FCI operates through five zonal offices and 34 regional offices across the country.

4.FCI primarily focuses on exporting food grains to stabilize prices in comparison to the international market.

Select the correct answer using the codes given below:

A) 1 and 2 only

B) 2 and 3 only

C) 1, 2, and 3 only

D) 2 and 4 only

Explanation:

Correct: The Food Corporation of India (FCI) was established in 1965 under the Food Corporations Act, 1964, to implement the food policy of the Government of India.
Correct: FCI is responsible for the procurement, storage, and distribution of food grains in India, particularly for the Public Distribution System (PDS) and other welfare schemes.
Incorrect: FCI operates through five zonal offices and 24 regional offices across the country, not 34 as stated in the question. These offices coordinate the procurement, storage, and distribution activities of FCI.
Incorrect: FCI primarily focuses on ensuring food security and supporting farmers by procuring food grains at Minimum Support Price (MSP). It does not primarily focus on exporting food grains to stabilize prices in the international market.