This is an archive article published on July 29, 2023

Opinion Express View on Centre’s grain policy: Rice and fall

Centre is not in a position to supply grain over and above the requirements of the PDS. States and distilleries need to recognise that

Centres grain policy, Food Corporation of India, National Food Security Act, public distribution system, PDS beneficiaries, open market sale scheme, FCI grain supply, Narendra Modi govt, PDS quota, indian express, indian express news

The Modi government obviously does not want to take chances ahead of national elections in 2024.

July 29, 2023 07:35 AM IST First published on: Jul 29, 2023 at 05:00 AM IST

Till hardly a couple of years ago, the godowns of the Food Corporation of India (FCI) were overflowing with rice and wheat. It not only enabled the Centre to double the quota of free/near-free grain supplied to public distribution system (PDS) beneficiaries, the country also shipped out record quantities of the two cereals. Further, the FCI, from 2020-21, began selling surplus rice to distilleries for production of ethanol used for blending with petrol. But since January, the Narendra Modi government has restored the PDS quota to the original 5 kg/person/month.

Between May 2022 and this month, it has banned exports of wheat and all non-parboiled non-basmati rice. And now, the FCI has halted rice sales to distilleries as well. This, more than a month after the Centre discontinued the supply of FCI grain to states under the open market sale scheme (OMSS).

These actions convey a worry over grain availability in general and stocks in public warehouses. While current stocks are more than adequate and the monsoon too has been good so far, the uncertainty pertains to El Niño’s impact down the line on both the 2023-24 rice and wheat crops. The Modi government obviously does not want to take chances ahead of national elections in 2024.

Also Read | Why the govt has more cash, less grain to give

Poor and vulnerable families have been largely insulated from retail cereal inflation thanks to the PDS. Ensuring enough stocks to keep that grain flowing would, then, receive topmost priority. Congress-ruled Karnataka may see politics in being denied 2.28 lakh tonnes (lt) of rice to provide poor households in the state an additional 5 kg/person/month — and for which it was willing to pay FCI Rs 34/kg under the OMSS. But what if other states, including those under BJP, were to also make similar demands for additional grain? Nor is the 24.22 lt of rice supplied to ethanol distilleries since 2020-21 particularly huge. However, they all add up.

Clearly, the Centre is not in a position to supply grain over and above the requirements of the PDS, which it is obliged to under the National Food Security Act. This wasn’t the case until quite recently. Both states and distilleries need to recognise that — the former before promising more free grain to voters and the latter mainly reliant on supply of FCI rice at Rs 20/kg. Distilleries attached to sugar mills may face fewer issues, as they would have access to molasses once crushing starts from October. Even they must look at alternative feedstock — from maize and barley to millets. The Modi government should stay committed to achieving 20 per cent ethanol blending in petrol, but not through the FCI.