#97: GS3 | Buffer stock & food security issues

Objectives, Handling, Challenges, and Way Forward | Free high value notes

Issues of Buffer Stock and Food Security is an important topic of GS3. Sharing GS3 Mains notes on this topic compiled by @Conquerias24, a Post Graduate in Economics from Madras School of Economics. Do follow him @Conquerias24!

• Pool of commodities like rice, wheat etc. maintained to provide food security

• It enables government to tackle unforeseen emergencies like droughts, etc.

Objectives of Buffer Stock

1. Achieve food security in the country

2. Income security to farmers via MSP based procurement

3. Achieve price stability by stabilizing the supply of commodities

4. Continue social welfare programs like PDS, Mid day meal schemes etc.

5. Prevent food grain shortage during emergencies like droughts, wars, etc.

Handling of Buffer Stock in India

• Food buffer stock of central govt pool is handled by:

  • State government agencies

  • Food Corporation of India

  • States taking part in decentralized procurement scheme

• FCI is established under Food Corporation Act, 1964 for fulfilling the objectives of India’s food policy

• The stocking norms of buffer stock comprises of:

  • Food Security stocks: To adjust for shortfall in procurement

  • Operational stocks: To meet monthly requirements of TPDS & other welfare schemes

Challenges in Maintaining Buffer Stock

1. High cost of logistics & administration as seen in the following:

   1. Wastage of food grains

   2. Diversion & Pilferage

   3. Transportation issues: Spillage & spoilage

   4. Lack of sufficient storage space & infrastructure

2. Developed countries accuse India of trade distortion

3. Skewed Cropping pattern: MSP for food grains like rice and wheat lead to overproduction of these food grains

4. Open-ended Procurement: Leads to issues with storage

5. Rising cost of operations: Higher acquisition Cost (In terms of rising MSP) & high storage costs due to inadequate capacity

6. De-facto Nationalization of Market: With 75% procurement of food grains by govt, little is available for open market which pushes up prices & neutralizes much of the benefits that govt provides via subsidies.

Way Forward

1. Investment in Storage Infrastructure

2. Allow private sector to procure & store food grains

3. Reduce number of beneficiaries under NFSA from 60% to 40%

4. Adopt DBT system for transfer of funds to beneficiaries

5. Abolishing levy rice - Under this levy rice policy, govt purchases a certain amount of rice from mills compulsorily, called levy rice. The rest, mills can sell in open market. 

6. Reforms in MSP system 

• Dimensions of food security: 3A i.e. Availability, Accessibility, Affordability

  • Availability - Adequate production & supply of food grains

  • Accessibility - Food to be in reach for everyone without any discrimination

  • Affordability - Individuals have sufficient money to buy sufficient, safe, nutritious food to meet their dietary requirements

• Global Hunger Index 2022: India107th out of 121 countries reflection serious deficiency in food security

• Food and Agriculture Report 2018: 195.9mn of 821mn total undernourished people in India (24% of global hunger)

• Undernourishment in India: 14.8% (higher than both, global and Asian average)

Framework of Food Security in India

• Constitutional Provision: Article 21 - Right to live includes Right to Food

• Buffer Stock: Procured at MSP and stored at FCI warehouses in diff cities of India

• NFSA, 2013: Paradigm shift in approach to food security from welfare to rights approach (Covers 75% of rural population & 50% of urban population)

• Public Distribution System: Key component of govt’s food policy where the procured commodities like rice, wheat etc. are allocated to states for distribution

Challenges related to Food Security

1. Corruption in management of food grains

2. Soil Degradation: Negative impact on crop yield

3. Lack of accessibility to a lot of poor people in the country

4. Impact of climate change: Unpredictable rainfall, droughts etc.

5. Invasive weed threats: In the past 15 years, India has faced more than 10 major invasive pest and weed attacks.

6. Faults in procurement: Farmers have diverted land from producing coarse grains to the production of rice and wheat due to a minimum support price.

7. Lack of efficient management framework of food security schemes

   1. Bogus ration cards

   2. Leakages

   3. Exclusion/inclusion errors

   4. Lack of social audit mechanism

Way Forward

1. DBT through JAM for transfer of subsidies efficiently without leakages

2. Precision agriculture with use of technology like micro-irrigation systems

3. Sustainable farming systems: Natural Farming, ZBNF, Organic Farming etc.

4. Promotion of millets: e.g. International Year of Millets (2023), MIIRA Initiative

5. Ensure transparency in food stock holdings by using better IT technology and communication networks

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