Rice, wheat buffer stock move may push market prices up
NEW DELHI: In a final push to the national food security law, the Union cabinet on Thursday would consider a proposal to increase buffer stock of two vital food grains — rice and wheat — by about 60% for easy roll- out of the law. The move may result in increase in prices of food grains in the open market.
As per the Food Security Law, the state governments have one year for implementing the law from the day of its enactment — September 2013. The law provides for priority households getting 5 kgs of food-grains per month, and Antyodaya households 35 kg per month. The combined coverage of priority and Antyodaya households should be 75% of the total rural population and 50% of the urban population.
Moving a ste p closer to achieving the good of food security, the food ministry has proposed change in regulations to maintain minimum 150 metric tonnes of buffer stock in a year. As of now the minimum buffer stock to be maintained is 99.30 metric tonnes in a year.
The government maintains buffer stock on quarterly basis for operational and strategic purposes. The operational purpose is to provide food grains for the public distribution system ( PDS) as per quota fixed for each state.
The strategic stock is meet emergency situations like drought or natural calamity.
The food ministry has proposed substantial increase in both operational and strategic stock to ensure implementation of the law. Its possible implication could be an increase in prices of food grains being sold in the open market.
With change in buffer stock requirement, the government would need an increase in capacity of silos to store additional food grains. The Cabinet has already approved a policy for public private partnership to build international quality silos. However, the sources said the response of the private players to the policy has been poor because of “inflexible” norms stipulated. A large amount of food stock goes waste even now because of poor quality of Food Corporation of India’s silos.