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Harish Damodaran

NEW DELHI, Nov. 5

FINALLY, it looks as though the Government is gaining some control over managing its burgeoning foodstocks. A concerted export drive has enabled total foodgrain stocks in the Central pool to dip to 514.1 lakh tonnes (lt) as on October 1, 2002, compared to 582.8 lt on the same date last year. While wheat stocks have fallen from 368.3 lt to 356.4 lt, the decline has been sharper in the case of rice (from 214.5 lt to 157.7 lt).

Although the Food Corporation of India (FCI) is still carrying stocks much in excess of the minimum `buffer' norm — which, for October 1, is 181 lt, comprising 116 lt for rice and 65 lt for wheat — officials in the Ministry of Consumer Affairs, Food and Public Distribution claim that the situation is now very much under control.

``If stocks have to come down or even stabilise at reasonable levels, we need to first of all tackle the flow problem, which means aligning grain offtake levels to that of procurement. This problem of mismatch between high foodgrain procurement and low offtake levels seems to have been sorted out now'', the officials said.

During 2000-01 and 2001-02 (April-March), the FCI and State Governments agencies procured 356.8 lt and 409.2 lt of foodgrains, whereas total offtake in these years amounted to just 178.8 lt and 313 lt, respectively. It was this huge gap that led to the unprecedented build-up of grain inventories in FCI's godowns.

But the scenario has undergone a drastic change in the current fiscal. Total grain offtake during April-September 2002, at 223.4 lt, has been almost twice the 114.2 lt lifted from the Central pool during the first six months of the previous fiscal. While wheat offtake has gone up from 54.9 lt to 95.4 lt, lifting of rice has soared from just 59.3 lt to 128 lt.

From the accompanying table, it can be seen that the boost in offtake levels has been mainly due to exports. Of the total 223.4 lt of grain offtake during April-September, this year, lifting by exporters accounted for nearly a third, i.e 70.5 lt (47.3 lt of rice and 23.2 lt of wheat). Open sale of rice and wheat to millers/dealers contributed another 25.8 lt.

If current trends hold, total offtake during the current fiscal may touch 450 lt, which will be way above the 35-40 lt that would be procured during 2002-03 as a whole.

In other words, the mismatch between high procurement and low offtake no longer exists.

What is significant about the present surge in offtake is that it has been largely driven by sales to exporters and millers. The combined share of exports and open sale in total Central pool offtake has risen from 16.7 per cent in 2000-01 to 32.8 per cent in 2001-02 and 43.1 per cent in April-September 2002. On the other hand, the corresponding share of the targeted public distribution system — the traditional avenue for lifting of FCI grain — has fallen from 65.5 per cent to 44.2 per cent and 37.9 per cent, respectively.

The TPDS is, in fact, becoming increasingly marginal to the Government's public foodstock management policy, so much so that offtake under this head during the current fiscal has below the combined lifting under exports and open sale.

In all likelihood — assuming higher lifting of wheat by roller flour millers in the second half — total offtake under the latter two `non-traditional' heads will touch 210-220 lt during 2002-03.

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