The bountiful harvest of Punjab is now raising a stink. At a time when the Opposition has held up Parliament over high foodgrain prices,over 12 lakh metric tonnes of rice,paddy and wheat have rotted in Punjabs godowns and on open plinths this decade courtesy the problem of storing its plenty that revisits the state year after year. Of the total damage,4.56 lakh metric tonnes belonged to the central agency Food Corporation of India (FCI),and 7.5 lakh MT to Punjabs five state agencies Pungrain,Markfed,Punjab Agro,Punjab State Warehousing Corporation (PSWC) and Punsup. Since the FCI stores the entire rice procured from the state for the central pool and only 15 per cent of the wheat,its damage figures are more for rice. Nearly 2.94 lakh MT rice and 1.18 lakh MT paddy (unmilled rice) have been declared as damaged by the agency between 2001 and 2010. In case of wheat,the damage amounts to 43,872 lakh MT,against nearly 8 lakh MT that rotted in the custody of the five state agencies,which store 85 per cent of the wheat procured for the central pool over 90 per cent of it on open plinths. Though a part of the actual cost was later redeemed by the FCI through auction of the damaged stocks as cattle and animal feed,industrial use or manure,the difference between the cost realised and the current prices of the foodgrains still adds up to a loss of Rs 56 crore. The state agencies,in their claim-sheet to the Union Food Ministry,have claimed Rs 392 crore for the damage of 7.56 lakh MT wheat. Together,the loss is Rs 448 crore of foodgrains in a country fighting hunger. Rising stocks,falling private purchases THE genesis of the storage crisis,says the FCI,lies in the overflowing buffer stocks of the country. Against its total covered storage capacity of 419 lakh MT across the country,the FCI is currently holding 600 lakh MT of foodgrains. As a result,178 lakh MT of foodstocks are lying in the open,with nearly 60 per cent of this 99.82 lakh MT in Punjabs fields,schools,market yards and closed sugar and rice mills. Against the average for the past six years,the FCI is currently holding nearly 1.5 times more foodstocks. In 2006-07,our countrywide wheat procurement figure was 92 lakh MT,while in 2009-10 it was 254 lakh MT,with Punjab alone contributing 107.3 lakh MT. In rice too,the total procurement has gone up by 30 per cent,to 336 lakh MT in 2009-10,against the procurement figure for 2007-08. So even though our offtake for the Public Distribution System nationally grew to 148 lakh MT for wheat and 223 lakh MT for rice last year,we have still much more stocks to handle than our storage or movement capacity, says Punjab FCI DGM (Storage),Aseem Chabbra. Meanwhile,Punjabs contribution to the central pool went down from 57 per cent in 2003 to 42 per cent in 2009-10,owing to higher contribution from states such as Madhya Pradesh,Bihar,Rajasthan,Uttar Pradesh,Maharashtra and Gujarat some of them have even become wheat-surplus states further worsening Punjabs storage woes. The high minimum support price (MSP) for wheat and paddy is the reason private buyers keep away from mandis. So despite movement of 155 lakh MT of wheat and rice from the state in the year 2009-10,Punjab is currently holding 111 lakh MT wheat,99.82 per cent of which is stacked on open plinths covered by tarpaulin sheets,known as CAP storage. THE MOP-UP AFTER segregating damaged stocks from those with higher than 5 per cent damage,the FCI upgrades lakhs of metric tonnes of foodstocks every year. The foodstocks with more than 5 per cent damage are classified as non-issuable and therefore unfit for the public distribution system (PDS),and are yet again segregated to be auctioned under five different categories depending on the percentage of damage while the worst of the lot is totally disregarded,the rest goes for either industrial use,animal feed,cattle feed or manure. Consider this: Nearly 4.09 lakh MT wheat stored on open plinths in 1999 in Fazilka in Punjabs remote Ferozepur district was finally lifted by the FCI in 2005. The maximum limit for open storage is 12 months but it was in 2005 that the FCI asked us to upgrade the entire stock by opening the 95-kg bags and segregating them into smaller 50-kg ones. Three food officials,including me,were later chargesheeted by the state food agency,Punsup,for damages, recalls Sushil Verma,a Fazilka-based food inspector who has since retired but is still facing criminal and civil suits for negligence and has also been denied all retirement benefits. And Verma is just one of hundreds of food officials facing similar charges,some even found innocent by courts or inquiry committees set up by the respective state agencies. The conviction rate is even higher in the state FCI,where 4,000 officials were slapped by the Vigilance Department with corruption charges in 2007. The number is down to 300 now after set targets for damage and loss were framed,forcing officials to be on their guard,and the permissible damage percentage progressively reduced from 0.5 per cent in 2000 to 0.18 per cent in 2010. The blame game THE damage figures have sparked off a blame game between the FCI and Punjab Food and Civil Supply Department,which oversees the procurement and storage operations of the five state agencies. While the FCI does not completely discard Punjabs theory that the damage is the result of foodstocks lying unsold for long periods,it also blames wilful neglect and wrong site selection by the states agencies. For example,it cited glaring irregularities in the case of storage in Kotla Bhai Ka area in its correspondence with Punjab Agro. About 16,000 MT of wheat was stacked by the agency at Kotla Bhai Ka area in 2008 in a low-lying open field. We asked them to move out the stock on priority basis but it was found unfit for dispatch within two months of its procurement. On enquiry the lone official supervising the stock was found to be negligent and the site selection for open plinth storage was poor, a senior Punjab FCI official said. A letter written by the FCI,Punjab,to its headquarters and the Food and Civil Supplies Ministry,Government of India,on the low procurement of paddy by it also highlighted its stringent inspection measures,compared to the state agencies laxity. As the FCI stocks are subject to stringent supervision,its staff has to be very particular about the contentious issue of moisture content,discoloration and damage of procured wheat and rice, the letter said. Procurement by state agencies,on the other hand,it said,was done under directions from the state government and led to below-specification foodgrains being lifted under pressure of farmer bodies. The state agencies,on their part,blame the damage on lack of a proper storage policy and tardy progress in tendering for godowns. Pointing to the FCIs initiative to create 127.6 lakh MT warehousing space in the entire country,including 71.25 MT in Punjab and 39 lakh MT in neighbouring Haryana,a senior food and supply official said: In a span of 11 months,it has floated its third tender,each time with revised norms. Its guiding rates and guarantee period for hiring private godowns were not lucrative for private investors. DE-HIRING POLICY While the storage crisis has deepened now owing to buffer stocks,by the FCIs own admittance,the capacity was proactively decreased during lean years. Interestingly,the annual confidential reports (ACRs) of FCI officials even carry a high rating for those who save rent to the corporation by de-hiring godowns. For a long time,while the FCI gave up private godowns with a capacity to store lakhs of metric tonnes,newspaper advertisements offered corporations own godowns for hire. Says Col N S Dhillon,the general secretary of Punjab Private Godown Owners Association: The high land prices in Punjab are a huge deterrent for investors. Therefore,the foodgrain storage policy should be for all times to come. All that a investor needs is continuity in payment of rent so that there is no uncertainty of his godowns lying vacant. Punjab Food and Civil Supply Minister Adesh Pratap Singh Kairon,says state agencies cannot be expected to hold foodstocks for an unreasonably long period without adequate scientific storage and management.It is for the Government of India to deal with the stocks or endorse a proper storage policy for Punjab, he says.
