Prices soar, 61,000 tonnes of foodgrain rot

Prices soar, 61,000 tonnes of foodgrain rot
Nitin Sethi, TNN, Jul 27, 2010, 04.59am IST



NEW DELHI: The government admitted to the empowered group of ministers (EGoM) on food and prices that 61,000 tonnes of foodgrain had rotted in its granaries as it was kept with poor protection for too long. The EGoM headed by finance minister Pranab Mukherjee was ascertaining the status of overflowing stocks in Food Corporation of India godowns.

Sources said Haryana and Punjab were unable to protect or sell the 15.5 million tonnes of wheat lying in the open under tarpaulins.

While Punjab, which is seeing emergence of Adani as a private player in the grain storage business, admitted that 49,000 tonnnes of wheat had gone waste, the Union government warned that 1.36 lakh tonnes of wheat that it procured in 2008-09 and 27.38 lakh tonnes of wheat procured in 2009-10 had exceeded the one-year period grains can ideally be stored without rotting.

The government may be hard pressed to take care of the grain considering its attempts to release grains in the open market have failed with few bulk buyers showing interest and merely 0.27 lakh tonnes of grain being sold after April.

Introduction of the National Food Security Act is only going to compound the problems for the government. While UPA would find it hard to reduce the allocations (and therefore procurement and storage) of grains in southern states such as Tamil Nadu which have a strong historical record of picking up grains under both the APL and BPL quota, the Centre would have to procure yet more to supply the poorer states or districts. The storage situation is bound to only get worse as government increases its procurement for the additional allocations.

In the meeting on Monday, a proposal to increase allocation to the poorer states or districts in wake of overflowing granaries as a build-up to the Sonia Gandhi-led NAC's idea of universalisation of PDS in 150 districts was discarded. Instead, the EGoM decided to sell additional 3 million tonnes of grain to APL across the country.