The Narendra Modi government has a problem of plenty on its hand. As per Food Ministry data for the month of June the country’s total food grain stock is touching 75 million tonnes. However, the buffer stock norm for the July quarter is only 41 million tonnes.
The country presently has a total storage of 86 million tonnes which include maize, pulses etc. Moreover, the buffer stock norm from October 01 should be 30 million tonnes, as per ministry data.
To address the problem of buffer stock, limited storage capacity and to avoid wastage and damage of the existing stored crops, the government is once again embarking on an ambitious plan to release an additional 40 million tonnes of food grains through the public distribution system
CNBC-TV18 has also learnt that there is an internal consensus on tapping the PDS to release the extra food grains and a cabinet nod is likely soon on this matter. Sources have also indicated that the cost of the release of the additional 40 million tonnes of food grain through PDS will likely be absorbed in the FY20 food subsidy budget.
A similar move took place in 2011-12, when the then UPA government had faced a similar situation with total food grain stock touching 80 million tonnes.
Officials have told CNBC-TV18 that the policy of high MSPs for wheat and rice have skewed the production in favour of these crops leaving agencies with no option but to go for higher and higher procurement.
The plan to release the 40 million tonnes will unfold over a period of one year and this will also create space for the kharif crops.