November 16, 2014

Save FCI, Save PDS

Asim Bala

FOOD Corporation of India (FCI) is a crucial public sector undertaking in respect of public distribution system (PDS). FCI was formed in 1964 and its main objectives were to procure food grains directly from the farmers, supply them for PDS distribution and for maintaining price stability during scarcity. Despite its immense importance, the BJP-led government at the Centre is hell bent on its privatisation. Intention of Modi Government The intention of our government with regards to the fate of FCI unfolded on June 19, 2014 in Parliament. The model of development that nowadays finds expression in Parliament is very much shocking to us, as well as for FCI. The 10-point road map for reform that does not alter either the minimum support price for foodgrains or public distribution system (PDS), transforms the grains market as follows: Break up the FCI into the National Grains Procurement Corporation (NGPC), the logistics and Distribution Corporation of India (LDC), Central Warehousing Corporation (CWC). All are to be leased out to the private sector. The private sector will continue to procure food grains on commercial lines at market prices. Procured stocks will be stored in the Central Warehouse or state Warehousing Companies as well as private Warehouses and expected that all have been maintained by private agencies. It’s expected that the above reform measure should be introduced within 24 months. The basic minimum support prices for PDS will be cut down i.e food subsidy by 15 per cent i.e cut down the overall food subsidy bill be ten thousands crores annually. Those set of reforms would also break the monopoly of the state as well as central government in the food grains market. National Food Security Act The National Food Security Act (NFSA) was notified on September 10, 2013, with the objective of providing food and nutritional security to the population by ensuring access to adequate quantity of quality food at affordable prices. It provides for coverage up to 75 per cent of the rural population and up to 50 per cent of the urban population. It stipulates an entitlement of 5 kg of food grains per person per month for priority households and 35 kg per household per month for Antyodaya Anna Yojana (AAY) card holders at subsidised prices of Rs 3 per kg of rice, Rs 2 per kg of wheat and Rs 1 per kg of coarse grains. McKinsey Report As we know so far, the recommendations of US-based consultancy firm M/s McKinsey & Co. with regards to FCI pose a serious threat to the very existence of the corporation and its workforce. The Government of India as well as FCI are bent upon implementing the report which has been submitted by the management consultant agency. It has made some retrogade recommendations for FCI like outsourcing its key operations including foodgrains procurement, handling, transportation and distribution; de-hiring and renting out of FCI godown; and targeted VRS to reduce the existing man power. In the garb of FCI's improvement, the firm has advocated for privatisation of the corporation. Distribution of Foodgrains Trough FCI Only The present international situation is not favourable to the common people all over the world. Now, the FCI has changed its policies due to globalisation. In this situation, poverty, hunger disease, illiteracy and unemployment have increased many fold. Over these years, lots of changes have been made in the PDS. Rural poverty has increased. A large section of the peasant is becoming pauperised. Due to food inflation, decline the counties of food grain supply, gradually closing the food grains depots. If we examine the Components of distribution costs, it emerges that handling expenses, storages charges, transport costs etc. are the main expenditure for operational costs which could be reduced after proper management system. It is observed that food grains are not being stocked at FCI Godown even FCI is having its own Godown. Storage capacity, both covered and cover with synthetic sheet. The food grain storage of central stocks has increased from 34.14milion tons to 36.68 millions tons in 2013. Guarantee of Food Security According to the National Sample Survey (NSS) Report-2009/2010 on Income and Expenditure in Urban Household, as much as 74 per cent of urban population are below the minimum nutritional norms of 2,100 calories per head per day, fixed by the Planning Commission. Majority of these households belong to the unorganised labourers and among rising number unemployed and under-employed. After India took the neo-liberal policy trajectory, poverty increased to 75 per cent of rural and 73 per cent of urban population by 2009-2010. Per capita availability of food grains dropped to 440 gm during the period between 1989-91 and 2007-09. For food security, we demand implementation of the Swaminathan Commission's recommendations for fair price and profit margins for farmers and institutional credit facilities to them. We oppose free trade agreements of agricultural produce, complete stoppage of future trading of foodgrains through amendment of the Essential Commodities Act and opposes FDI in retail trade including foodgrains. Hard Days In FCI FCI is faced with acute liquidity crunch because of food subsidy dues amounting to Rs 50,000 crore. They are looking for working capital requirements. FCI is mandated to safeguard the interest of the farmers as wall as disbursement of food grains throughout the country through the public distribution system. They also keep the buffer stocks of food grains for national food security programme for the country. FCI has written to the government, informing about its financial position. This poor financial situation is due to mismanagement of the management. Crores of poor people are fully dependent on FCI for food but our government is so reluctant to safeguard the corporation's interest that it is going to close down for inefficient handling. Problems of Employees And Workers Both employees and workers are having some long-standing problems that need to be sorted out with the management in due course for uninterrupted operations. Here are some of the demands of the workers: 1. Abolition of contract system and absorption of contract workers. The workers employed through contractors are being deprived of their rights to a great extent. The union demands equal wage for equal work; 2. Immediate implementation of 50 per cent merger of DA with basic pay; 3. Regularisation of direct payment system workers. This DPS workers working since long are being deprived. There should be a clear guideline regarding eligibility of DPS workers for getting departmentalised; 4. Recruitment beyond 5% vacancy on the basis of legal heirs; 5. Promotion of qualified Cat-IV staffers to Cat-III posts; 6. Immediate recruitment at CAT-III and CAT-IV levels (in all cadres) particularly at field level due to prevailing condition of acute shortages of manpower for recent mass retirement. 7. Regular maintenance of all civil and electrical engineering areas as godowns being almost half a century old pattern having acute regular problems in floor, platforms, roof, inside road, drainage, vally gutters; and setting up of hi-tech modern godowns with all modern amenities to facilitates the public distribution system in its upgrade level as desired by our Prime Minister. We know the problems and intention of the government even though we appeal to all people to raise their voice to save FCI and save PDS.