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CCEA approved revised buffer norms of foodgrains for better management of food stocks

Jan 17, 2015 15:30 IST

Cabinet Committee on Economic Affairs (CCEA) on 16 January 2015 approved revision in buffer norms of foodgrains in the Central Pool. The revision was approved to ensure better management of food stocks in the country.

Revised buffer norms of food grains
Now the Food Corporation of India will have to maintain higher buffer stock in different quarters as compared to the existing norms of 2005, they are as follows

As on

Existing since April 2005

Revised

1April

21.2 million tonnes

21.04 million tonnes

1 July

31.9 million tonnes

41.12 million tonnes

1 Oct

21.2 million tonnes

30.77 million tonnes

1 Jan

25.0 million tonnes

21.41 million tonnes

Apart from this, the CCEA also approved that the Department of Food and Public Distribution can offload excess stock in the domestic market through open sale or through exports, in case the stock of food grains in the Central Pool is more than the revised buffer norms.


An Inter-Ministerial Group (IMG) has also been constituted to implement the decision.  It will comprise of Secretary, Department of Food & Public Distribution, Secretary, Expenditure and Secretary, Consumer Affairs and will be responsible for managing the food stock.

Why the need to revise buffer norms?
The buffer norms were increased in light of significant increase in the off take of foodgrains under Targetted Public Distribution System (TPDS) and also in light of the increased foodgrains requirement necessitated by the implementation of National Food Security Act, 2013 from 5 July 2013.

The Food Security Act, 2013 promises 5 kg of grains per person every month at 3 rupees and 2 rupees per kg for rice and wheat respectively. The scheme will cover two-third of the population.

However, the revised buffer norms are lower than what was suggested by the then UPA government. UPA government led by Manmohan Singh had proposed to increase the buffer norms by 60 percent.

Narendra Modi-led government increased the buffer norms only by 50 percent. This suggests that government is keen to better target the subsidies and maintain the fiscal deficit within the limits provided by Union Budget 2014-15.

This is because in order to meet the increased requirements of foodgrains necessitated by Food Security Act, the FCI will have to incur expenditure of 25-32 crore rupees as carrying cost to hold 1 lakh tonnes of wheat and rice annually.

 

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