Food Corporation of India

Food Corporation of India

Context: The Food Corporation of India (FCI) has recently reported a decline in wheat stocks, falling below 100 lakh tonnes for the first time since 2018..
Background:
• Currently, the wheat stock stands at 97 lakh tonnes this month. Despite the drop in wheat stocks, the existing stock is sufficient to meet the National Food Security requirements and exceeds the buffer norm.

About Food Corporation of India:
• The Food Corporation of India (FCI), established in 1965, plays a vital role in safeguarding food security in India. FCIs main mandate is to procure, store, and distribute food grains nationwide. It operates under the Ministry of Consumer Affairs, Food, and Public Distribution.
• FCI procures wheat, rice, and other food grains directly from farmers during the harvest season. This procurement not only stabilizes prices but also ensures that farmers receive fair compensation for their produce. FCI maintains a buffer stock of food grains to address emergency requirements like natural disasters or supply disruptions, serving as a safety net for the nation.
• Under the Public Distribution System (PDS), FCI supplies food grains to states for distribution to eligible households at subsidized rates, ensuring affordability. FCI manages an extensive network of storage facilities, including warehouses and silos, for storing food grains securely.
• To balance supply across regions, FCI transports surplus food grains from producing states to deficit states, reaching even remote areas. By regulating food grain supply, FCI helps stabilize market prices, intervening when prices become too high or too low.
• The economic cost of food grains procured by FCI comprises the Minimum Support Price (MSP) and any bonuses paid to farmers, along with procurement incidentals and distribution costs. FCIs efforts contribute significantly to national food security by maintaining a consistent supply of essential commodities.