Statutory body

• The Food Corporation of India (FCI) is a statutory body within the Ministry of Consumer Affairs, Food, and Public Distribution. 
• It was established in 1965, following the enactment of the Food Corporation Act of 1964. 

Objectives

• The main objective is to implement the National Food Policy and ensure food security by procuring, storing, and distributing food grains.

Structure

• The FCI is headed by a Chairman and Managing Director (CMD), usually an IAS officer on deputation. 
• The CMD is supported by five Executive Directors (EDs), each in charge of a different function, such as procurement, storage, movement, quality control, and finance.

Functions

• Procuring wheat and rice at Minimum Support Prices (MSPs) to ensure fair earning for farmers.
• Storing purchased food grains in FCI or hired facilities to ensure sufficient buffer stocks.
• Food grains are distributed to states at Central Issue Prices (CIPs) under public welfare schemes such as the Public Distribution System (PDS) and the Mid-Day Meal Scheme.

Significance 

• FCI promotes agricultural development by providing fair prices to farmers through MSPs, which encourage them to increase production and adopt better agricultural practices. This also improves food security and rural income.
• To ensure food safety, it conducts regular inspections and audits, deploys quality control personnel, and uses improved storage techniques like silos and metal bins.

Challenges

• Excessive procurement leads to overstocking and storage issues.
• Limited storage capacity, resulting in food grain waste.
• The costs of procurement, storage, and distribution are high.
• Quality issues include improper storage and food adulteration.
• Overdependence on wheat and rice, with a lack of diversity in the food basket.

Shanta Kumar Committee

• The government established the Shanta Kumar Committee in 2014 to recommend restructuring and improving the Food Corporation of India (FCI)'s financial and operational efficiency in food grain procurement, storage, and distribution.
• Key Recommendations
  • • Reduce the number of beneficiaries under the Food Security Act from 67% to 40%, to focus on the most vulnerable and improve efficiency.
    • Allowing private players to participate in food grain procurement and storage to reduce the FCI's burden and to increase private sector efficiency.
    • FCI should conduct full-fledged grain procurement only in states with limited procurement capabilities. States that perform well, such as Haryana, Punjab, should be responsible for their own procurement.

Way Forward

• Limiting procurement to meet only buffer norms and encouraging state-level procurement.
• Growing storage infrastructure through public-private partnerships.
• Cost reduction through direct procurement from farmers and the use of direct benefit transfers.
• Streamlining the distribution system through initiatives such as "One Nation, One Ration Card."
• Diversifying the food basket in PDS by including millets, pulses, and oilseeds.
• Improving cooperation among central and state governments, farmers, and FCI by providing a unified platform for decision-making and information sharing.

PRACTICE QUESTION

Q.Consider the following statements in the context of the Food Corporation of India (FCI):

1. The Food Corporation of India (FCI) is a statutory body function under the Ministry of Agriculture & Farmers Welfare:

2. It maintains a satisfactory level of operational and buffer stocks of foodgrains to ensure National Food Security.

Which of the above statements are correct?

A) 1 only

B) 2 only

C) Both 1 and 2

D) Neither 1 nor 2

Answer: B

Explanation:

Statement 1 is incorrect:

The Food Corporation of India (FCI) is a statutory body under the Ministry of Consumer Affairs, Food, and Public Distribution, which was established by the Food Corporation Act of 1964.

Statement 2 is correct:

The Food Corporation of India maintains adequate operational and buffer stocks of food grains to ensure national food security. It plays a critical role in India's success in transitioning from crisis management-oriented food security to a stable security system.