Incorporated in the year 1965 as Food Corporations Act 1964. FCI has been working as a PSU at the Department of Food and Public Distribution Ministry of Consumer Affairs, Food and Public Distribution.
With 1965, the government was setup Commission on Agricultural Costs & Prices/CACP to indicate remunerative prices towards the cultivators.
- The main responsibility of FCI is to buy, store, transport, distribute, and sell food grains and other foodstuffs.
- CACP is an attached office of the Ministry of Agriculture and Farmers Welfare.
- FCI conducts its activities through a country-wide network of offices with headquarters at New Delhi.
Objectives of FCI
- Give remunerative prices to farmers.
- Change crisis management-oriented food security into a stable security system.
- Ensure food security of the nation by maintaining satisfactory level of operational buffer stocks of food grains.
- Distribute food grains throughout the country for the Public Distribution System.
- Effective price support operations for safeguarding the interest of farmers.
Food Security
- Food security has four pillars: availability, affordability, absorption, and stability.
Major Activities Undertaken by FCI
- Procurement: The Central Government extends price support for procurement of wheat, paddy, and coarse grains through the FCI and State Agencies.
- Distribution: FCI meets the requirements of Targeted Public Distribution System (TPDS) through grains procured which are issued at Central Issue Price fixed by the Government.
- Public Distribution System (PDS): PDS was set up in India during the inter-war period and has helped to keep the rise in food grain prices under control.
- Revamped Public Distribution System (RPDS): Introduced in June 1992 with the objective of revamping and rationalizing the PDS.
- Targeted Public Distribution System (TPDS): Introduced in 1997 for the poor and to check the budgetary food subsidies.
Transition from Universal Public Distribution System (PDS) to Targeted Public Distribution System (TPDS) in India
- TPDS aims at distributing food grains to below the poverty line people at highly subsidized prices, and food grains to above the poverty line people at higher prices.
- The National Food Security Act, 2013 (NFSA) would allow coverage up to 75% of the rural population and up to 50% of the urban population to receive subsidized foodgrains.
- The NFSA will cover around 67% of the total population.
Restructuring of Food Credit Institution
The High Level Committee formed for restructuring FCI
- All wheat, paddy, and rice procurement operations should be passed on to states that have more experience and infrastructure for procuring.
- The Negotiable Warehouse Receipt System should be taken up on priority and scaled up quickly.
- The MSP Policy should be revisited to provide better price support operations for pulses and oilseeds.
- FCI should contract out its stocking operations to various agencies and liquidate covered and plinth (CAP) storage.
- A transparent liquidation policy should be adopted which automatically comes into play when FCI faces surplus stocks more than buffer norms.
- The government should reconsider the coverage (67% of the population) under the NFSA as it is on the ‘higher’ side.
- The new face of FCI will be akin to an agency for innovations in Food Management System, focused on making competition in every segment of the food grain supply chain.
