Cabinet approved an equity of Rs 10,700 crore for FCI

Posted 07 Nov 2024

2 min read

The fund will be used as working capital in the financial year 2024-25 by Food Corporation of India (FCI).

The decision is aimed at bolstering the agricultural sector and ensuring the welfare of farmers nationwide.

Financing of FCI operations

FCI purchases the food grains for the Central Pool at the procurement prices ( known as Minimum Support Price) and issues the same at the Central Issue Prices fixed by the Government of India.
- The issue prices do not cover the full economic cost incurred by the Corporation in the procurement,movement, storage and distribution of food grains.
The difference represents the consumer subsidy for the Public Distribution System, and is paid to the Corporation by the Government of India.

Challenges with FCI: Low share in direct procurement (less than 5%), FCI-owned facilities remain under-utilised, Leakages in godowns, procurement of poor quality stocks and transit loss, etc.

Recommendations given by standing committee to improve FCI functioning

It can assist the state governments in creating adequate infrastructure for effective procurement.
Adoption of adequate scientific storage measures to prevent any damage.
Strengthen its vigilance mechanism in coordination with states.

About Food Corporation of India

About: Public sector undertaking under the Ministry of Consumer Affairs, Food and Public Distribution set up under the Food Corporation Act of 1964.
Mandates
- Undertake procurement of foodgrains at a minimum support price (MSP) to protect the interest of farmers.
- Distribution of food grains throughout the country for public distribution system (PDS).
- Maintain a satisfactory level of operational and buffer stocks of foodgrains to ensure National Food Security.