National Food Security Act: No plan to hike NFSA grain prices, says food minister Piyush Goyal

Food minister Piyush Goyal said on Thursday that there was no proposal before his ministry to increase the rate of foodgrain sold through ration shops under the National Food Security Act (NFSA).

The recent Economic Survey has recommended an increase in selling prices of wheat and rice under the NFSA. It said that the food subsidy bill is “becoming unmanageably large” and while it is difficult to reduce the economic cost of food management in view of rising commitment towards food security, there is a need to consider the revision of central issue price (CIP).

The CIP is the price at which wheat and rice are sold at ration shops. There has been no change in these prices since 2013: wheat at Rs 2/kg and rice at Rs 3/kg. Though the NFSA prescribes revision of the CIP every three years, this hasn’t been carried out. The Centre’s procurement expenditure routed through the FCI has ballooned over the years and is estimated to be Rs 1.73 lakh crore in FY20.

Asked whether there was any plan to reduce foodgrain procurement or to expand storage facilities, Goyal said the food ministry is closely working with Railways and state governments to expand capacities with silos near rail infrastructure.

The Commission for Agricultural Costs and Prices (CACP), in its rabi 2020 report, had recommended that the open-ended procurement system be reviewed. The CACP had in the past, too, pitched for direct procurement by private players, under the Private Procurement Stockist Scheme.

“Due to increased procurement of wheat and rice in recent years, the government has emerged as the single-largest buyer of foodgrain. In major wheat producing states like Madhya Pradesh, Punjab and Haryana, the government procures more than three-fourth of marketed surplus due to the open-ended procurement policy. This policy is driving out private sector from the market and has adversely affected crop diversification,” the CACP said.

Goyal also said that the government has prepared a roadmap for the Food Corporation of India to improve the quality of grain. The roadmap, as reported by FE on January 25, includes conducting third-party audits, junking archaic standard specifications for purchased goods, implementing end-to-end digitisation and seeking feedback from ration shop beneficiaries.

Earlier, food ministry officials said in a presentation that during the current procurement season in Uttar Pradesh, biometric verification of farmers is being carried out to ensure they receive payment in their bank accounts within 72 hours. Odisha, Chhattisgarh and Madhya Pradesh have showed interest to implement it from next season, officials said. Goyal, however, refrained from commenting if biometric verification has been made mandatory in Uttar Pradesh.

On complaints by farmer leaders of the government not facilitating payment of sugarcane dues in Uttar Pradesh, estimated at about Rs 10,000 crore, the minister said that last year’s arrears have almost been cleared and mills will pay this year’s dues soon.

Goyal, who is also in charge of the department of consumer affairs, said the government has been strictly enforcing rules regarding display of ‘country of origin’ on all products on e-commerce companies. “So far, 77 notices have been issued for violation of Packaged Commodity Rules. Out of that, five companies have compounded the offence. Action will be taken against remaining companies as per the law,” he said.

He also said that Bureau of Indian Standard has been successful in harmonising 84% of its standards with global standards to make sure that only good products are imported.