Covid-time demand helps whittle down FCI grain stocks

As against an overall grain offtake of 65.91 mt from public godowns in 2018-19 and 62.19 mt in 2019-20, the Modi government has made an aggregate allocation of 94.72 mt for this fiscal. (Representational image)

Covid-19 may have unleashed all-round economic devastation, but has also turned into an opportunity for whittling down the Food Corporation of India’s (FCI) massive grain mountain.

At 68.49 million tonnes (mt), the total wheat and rice stocks in the Central pool as on October 1 stood way below the record 97.27 mt at the start of June. The gap between the current and year-ago stocks, too, has narrowed down from over 15 mt to 1.5 mt between June 1 and October 1.

Much of this inventory drawdown is the result of the Narendra Modi government’s efforts at disposing of surplus foodgrains — including by distributing these free under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).

As against an overall grain offtake of 65.91 mt from public godowns in 2018-19 and 62.19 mt in 2019-20, the Modi government has made an aggregate allocation of 94.72 mt for this fiscal. That includes 55.24 mt under the Targeted Public Distribution System (or TDPS, which entitles beneficiary families to a monthly per-person ration of 5 kg wheat or rice at Rs 2-3/kg) and 5.24 mt under the Mid Day Meals, Integrated Child Development Services and other regular welfare schemes.

But over and above these have been the 32.11 mt earmarked under PMGKAY, 0.8 mt for migrant labourers returning to their home states and 1.33 mt of additional Covid-related allocations. The 5 kg extra grain per month to 80 crore persons under PMGKAY (during April-November) and 8 crore returning migrant labourers (for May-June) are being given free of cost.

The Food Ministry’s latest data shows actual offtake under TPDS at 25.14 mt during April-September. In the case of PMGKAY, the migrants’ and Covid-related schemes, the lifting figures were 20.68 mt, 0.64 mt and 0.97 mt, respectively till August-end.

But in spite of all these special schemes, the current stock of 68.49 mt in the Central pool is still 2.2 times the required buffer of 30.77 mt for October 1. The 68.49 mt comprised 43.74 mt wheat and 19.26 mt rice. In addition, the FCI and state government agencies held 8.19 mt of un-milled paddy, whose rice equivalent, at an outturn ratio of 67 per cent, worked out to 5.49 mt. Outturn is the share of rice extracted from paddy grains after removal of the outer husk and inner bran layers.

For October 1, the normative minimum stocks to run TPDS and other welfare schemes, plus maintain an additional “strategic reserve”, are 20.52 mt of wheat and 19.25 mt of rice. The actual stocks, on the other hand, amounted to 43.74 mt and 24.75 mt (including rice from un-milled paddy), respectively.

FCI incurs interest and storage expenses in holding excess stocks in its godowns. That “carrying cost”, estimated at Rs 5.41 per kg for 2020-21, is saved even when grain is given out free. The annual savings on the 33 mt of PMGKAY and migrants’ grain allocations alone will, thus, work out to around Rs 17,850 crore.

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