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Overview:

The Department of Food and Public Distribution oversees India’s food security by supplying subsidized grains, sugar and kerosene to eligible families. It also creates policies related to the sugar industry and the import/export of grains, sugar and edible oils.

more
History:

India’s public distribution system (PDS) began prior to Independence. In 1939, rationing was first introduced in Bombay by the British Government to ensure equitable distribution of food grains in urban areas at a time of rising prices. Rationing, therefore, served as a precursor to latter policies of stabilization and management of food grains.

 

The government under British rule first established a food agency, the Food Department, in December 1942, which created the All India Basic Plan to deal with issues such as procurement, contracts for purchasing agents, public distribution, inspection and storage.

 

Food shortages following independence, particularly in the 1950s, led to the importation of food grains from the United States. With the Green Revolution in the mid-1960s, India set out to establish food self-sufficiency, which entailed new efforts in food grains management. These included fairer prices for farmers and control of market prices and public distribution of essential commodities.

 

In 1965, the Food Corporation of India was established to function as an autonomous organization to handle the purchasing, storage, movement, transport, distribution and sale of food grains and other food stuff.

 

But it wasn’t for another two decades that the government of India created a cabinet-level authority to oversee PDS. In 1984, the Ministry of Food and Civil Supplies was established with two departments: the Department of Food and Department of Civil Supplies.

 

The original purpose of PDS was to stabilize food prices in a few urban areas, but it evolved into a poverty alleviation program with a specific goal of food security for India’s poorest families. Initially, the PDS was universal - available to all.

 

By 1992, the government revamped the system, limiting it to primarily drought prone, tribal and hilly, and remotely located area. Still it was available to everyone in the designated areas. 

 

Five years later, Targeted PDS was developed for families living below the poverty line (BPL) throughout the country.

 

The Indian Public Distribution System As A Provider of Food Security (by Alessandro Tarozzi, European Economic Review)

Performance Evaluation of Targeted Public Distribution System (Programme Evaluation Organisation, Planning Commission, Government of India)

more
What it Does:

The Department of Food and Public Distribution is responsible for India’s food security. It manages food supply through procurement/distribution of food grains, maintains food stocks, and monitors their movement and delivery through distribution agencies. Public Distribution System reaches the following household categories:

 

Antyodaya Anna Yojna

Launched in December 2000, Antyodaya Anna Yojna is focused on the Targeted Public Distribution System. It is for the poorest of the poor from Below Poverty Line (BPL) families. Recipients received up to 35 kg subsidized food grains per month. States/Union Territories cover distribution and transportation costs. 

 

Below Poverty Line

Below Poverty Line is a poverty threshold indicating economic disadvantage used to identify individuals and households that need government assistance. This threshold varies by rural versus urban, by state and within the state and is based on the Tenth Five-Year Plan (2002–2007) survey.

 

Criteria for programs implemented by the Government of India are:

 

  • Rural areas: Degree of deprivation according to certain parameters, with scores from 0-4: landholding, type of house, clothing, food security, sanitation, consumer durables, literacy status, labor force, means of livelihood, status of children, type of indebtedness and reasons for migrations.
  • Urban areas: Degree of deprivation in respect of seven parameters: roof, floor, water, sanitation, education level, type of employment, and status of children in a house.

 

State governments are free to adopt any criteria/survey for state-level schemes.

All recipients received up to 35 kg subsidized food grains per month.

 

Above Poverty Line Ration Cardholders

Food grain allocation depends on the availability in the Central Pool and past taken by the State/Union Territory. It ranges between 15-35 kg per family per month.

 

The department also enacts an edible oil management plan for quality control and ensuring availability of this oil at reasonable prices.

 

The department aids farmers by purchasing a predetermined amount of grains at rates determined by the government, the Minimum Support Price.

 

The department also formulates policies for the sugar sector such as fixing fair prices on sugarcane, ensuring a steady supply of sugar for PDS and fixing levy prices of sugar. It ensures development of sugar and sugarcane by advancing loans to the sugar industry from Sugar Development Fund.

 

The department creates policies related to import/export of food grains, sugar and edible oils.

 

Attached or Autonomous Bodies

Central Grain Analysis Laboratory (CAGL)

The Central Grain Analysis Laboratory is a premier lab that helps the ministry in establishing the standards for kharif and rabi crop procurement for the Central Pool. It serves to monitor and lay guidelines for the time of food grain procurement, storage conditions and subsequent distribution of the same by working closely with the Food Corporation of India. The organization is majorly involved in monitoring the quality and establishing specifications for procurement, import and export of the food grains. It also acts as a watchdog for monitoring the food grain quality under the Prevention of Food Adulteration Act.

 

National Sugar Institute (NSI)

A premier institute setup by the government of India in 1936, NSI is closely associated with the sugar and other allied industries, dedicated to promoting research, provide training to personnel and give technical backup to industries. It also sets up standards for sugar in India. It also offers postgraduate courses in sugar technology, sugar engineering, and industrial fermentation and alcohol technology. It also helps the sugar industry by providing research into the problems that are faced by factories.

 

Indian Grain Storage Management and Research Institute (IGMRI)

IGMRI has been set up in the year 1958 at Hapur with the objective of researching into the reasons and the extent of food grain losses happening due to crop infestation by insects, rodents and birds. It is also entrusted with the responsibility for development of standards for storage of grains and suggesting cost effective methods for their handling. It also carries out the research into the post harvest activities that are required for handling and storage of grains. IGMRI has field stations located in Ludhiana, Hyderabad, Jabalpur, Udaipur and Jorhat.

 

Quality Control Cells (QQC)

The Quality Control Cells help various state agencies in ensuring the procurement of good quality food grains. In addition, it also helps in checking the quality during storage and distribution of food grains such as rice, wheat etc. It acts as an enforcement agency in assuring that the government guidelines for the storage of grains are strictly followed by FCI, CWC and other state agencies. It also conducts investigations and inspections based on the complaints received and suggests the actions that are required. There are eight Quality Control Cells.

 

Directorate of Sugar

The directorate, set up as an attached office to the ministry, serves to ensure the implementation of policies that are concerned with the production, distribution and consumption of sugar in the country. It maintains statistical data on the production and consumption of sugar in the country. It monitors the establishment and expansion of new and existing sugar mills. It also releases the monthly levy and non-levy quota of the PDS and for sale in open markets.

 

Directorate of Vanaspati, Vegetable Oils and Fats (DVVOF)

The directorate was set up as an attached office to the ministry to ensure coordinated management of oils, especially edible oils. It severs to monitor the oil production in the country and adjust import duties accordingly. It strives to ensure the availability of oil in the market and to stabilize the oil prices in the county. The directorate also monitors the quality of the edible oils and it has an extensive laboratory setup to do so. It also carries our research in augmenting the quality of vegetable oils available in the market.

 

Central Warehousing Corporation (CWC)

Initially started in 1957, CWC aimed at providing logistical support to the agricultural sector of the county. Presently, it offers logistical and warehousing solutions to a multitude of public and private enterprises. It runs over 450 warehouses that store various notified commodities including agricultural commodities and provide for logistical support in transferring them. It has storage facilities for storage of more than 400 commodities. It also offers training and consultancy services for setup of warehouses. It is entrusted to act as the agent of government for purchase of agricultural produce.

 

Food Corporation of India (FCI)

In order to implement the objectives of the National Food Policy, FCI was setup in 1965 with the objective of price support to farmers and safeguard the interests. It also is responsible for the distribution of food grains via PDS. It is also responsible for monitoring and maintaining adequate minimum stock of food grains. FCI intervenes in the market to stabilize the food grain prices as may be required. Based on the need and stocks of food grains, FCI decides the sale and purchase of various grains.

 

Hindustan Vegetable Oils Corporation Ltd. (HVOC)

The operations of HVOC were suspended in June 2011 due to continued erosion of capital and losses. The company had eight units, which were engaged in the manufacture of Vanaspati Oils, refining and packing of edible oils. It also manufactures cornflakes and oats. HVOC’s Breakfast Foods Unit is the only operating unit of HVOC engaged in the manufacture of cornflakes and oats.

 

National Cooperative Consumers’ Federation of India Limited (NCCF)

Setup in the year 1965, the federation serves to act as a nodal point for providing supply support to state co-operatives and various agencies involved in the distribution network of food grains. It also provides technical assistance to co-operatives during the whole cycle of procurement, transport, storage, accounting and other necessary activities in order to improve the operating efficiencies. It also spreads awareness for the development of consumer co-operative movements in the country.

 

Institute of Food Security (IFS)

The Institute was established by the Food Corporation of India to expand on the knowledge about Food Security in India. It provides trainings to the personnel of the FCI. It strives to work on enhancing the knowledge and skill sets of FCI’s executives. It develops internal training programs for the FCI and provides trainings to corporate and other agencies on the topics of food security on a contractual basis. IFS is country’s premier Institute for advance learning on the topic of food security.

 

Warehousing Development and Regulatory Authority (WDRA), New Delhi (WDRA) WDRA acts an apex agency that caters to the implementation and regulations of the Warehousing Act, 2007. It looks after the development of new warehouses, regulatory processes and approvals for setup of new warehouses and to promote holistic growth of warehousing business. It also regulates the rates and other terms and conditions that are offered by warehousemen. It also arbitrates in the case of dispute between the warehouse and warehouse receipt holder.

more
Where Does the Money Go:

The department has been allocated net outlay of Rs.76267.16 crore ($13.87 billion USD) in 2012-13. A major portion of the budget allocation to the Department of Food and Public Distribution is for subsidies.

more
Controversies:

Food Rots in Government Warehouses, Millions Go Hungry

As of January 1, 2010, a Right to Information (RTI) inquiry showed that 10,688 lakh (1.07 billion) tons of food grains were found damaged in Food Corporation of India (FCI) depots, enough to feed over six lakh (600,000) people for over 10 years.  This isn’t the first instance. From 1997 to 2007, 1.83 lakh (183,000) tons of wheat, 6.33 lakh (633,000) tons of rice, 2.20 lakh (220,000) tons of unmilled rice and 111 lakh (111,000) tons of maize were damaged in various FCI godowns (warehouses).

 

In 2012, food grain still rotted in the country while millions remained hungry. One hundred kilometers from Union food minister K. V. Thomas’ hometown of Kochi, Kerala, 2,500 tons of wheat rotted in a warehouse. In the northern state of Punjab, considered India’s breadbasket, 6 million tons of grain worth at least $1.50 billion USD would go to waste. There are also reports of decomposing wheat in an area the size of a football field and as high as a house. The wheat has been there five years.

 

While India has bumper crops of wheat, its citizens starve. Many blame insufficient infrastructure and government apathy. Storage capacity hasn’t been upgraded in 25 years so wheat is officially stored outside. There aren’t enough sacks and tarps.  Grains are left exposed to the elements or minimally covered by a single piece of plastic. 

 

One proposed solution would be to distribute excess grain or release it via the Public Distribution System (PDS).  However, Pranab Mukherjee, the former Finance Minister, rejected this idea citing fiscal constraint. Distribution was estimated at an additional Rs. 5,000 crore ($923.19 million USD). Instead, the government this year permitted the export of up to 4 million tons of non-basmati rice.

 

Food Grains Rot in FCI Godowns Across India (Hindustan Times)

Rotting Foodgrain a Shame (India Today)

As Crops Rot, Millions Go Hungry in India (by Mayank Bhardwaj, Reuters)

Rajasthan: Grain Rot Continues Amidst Govt Apathy (by Swati Vashishtha, CNN-IBN)

Rotting Grain Adds To India's Food Problem (by Tanushree Sharma Sandhu, DW)

more
Suggested Reforms:

Enact a Universal PDS

PDS is supposed to bring food and fuel to the poorest in the country. But India is unable to target the right households. In 2004-05 the National Council of Applied Economic Research (NCAER) and the University of Maryland found that only 48% of the poor had access to BPL cards while 31% of the non-poor households HAD access to BPL cards. One solution is a universal PDS to ensure that the subsidized food reaches to those who need it the most. A universal PDS would be revamped to distribute more nutritional grains such as millet instead of wheat and sugar. 

 

India also faces rapid inflation on food prices. The week of February 6, 2010 food prices rose nearly 18%, making may daily items harder to afford. The Centre for Budget and Governance Accountability (CBGA) suggested that funneling affordable food grains via a universal PDS would bring down food prices. 

 

Universal PDS can Fix the Problem of Malnutrition (by Sonalde Desai, The Economic Times)

Is Universal PDS a Good Idea? (by Thiruvoipati Nandakumar, Indian Express)

The Task of Making the PDS Work (by Jean Dreze, The Hindu)

Universal PDS Only Way to Beat Hunger, Tackle Price Spiral? (by Subodh Varma, Times of India)

more
Debate:

Direct Cash Transfer Instead of PDS Ration

Background

A Delhi government pilot program funded by the United Nations Development Programme (UNDP) was testing the viability of direct cash transfers and also was an attempt to circumvent the corrupt PDS. The government is contemplating introducing direct cash transfer program in many cities and towns.

 

Raghubir Nagar, a resettlement neighborhood in West Delhi was selected as the first urban trial for giving cash instead of PDS rations. In 2011, households there received Rs. 1,000 ($18.41 USD) monthly in a female family member's bank account in lieu of rice, wheat, sugar and kerosene at subsidized rates.

 

Pro-Direct Cash Transfer Instead of PDS Ration  

Individuals with “below the poverty line” (BPL) ration cards are entitled to receive a certain amount of grains, sugar and kerosene per month. These items can only be picked up at the PDS shop, which many times is not open when it’s supposed to be. Also, supplies are often inferior quality and/or not full amount. Many supplies are siphoned off and sold on the black market. The Planning Commission estimate that 58% of subsidized food grain does not reach the intended beneficiaries. A direct cash transfer frees recipients to shop at wholesale markets, obtain better quality food, and not be at the mercy of the PDS shop.

 

Poverty Ridden Opt for Cash Transfer over PDS (by Prasad Nichenametla, Hindustan Times)

 

Anti-Direct Cash Transfer Instead of PDS Ration

The National Federation of Indian Women (NFIM) is concerned that direct cash transfers will reduce transparency of the economy and that funds will be misused by other family members. On a wider economic scale, there is worry that without PDS, the government will have a surplus of the food grain that was allocation for distribution. And since the government buys the grain at a minimum price per year, with a surplus, food grain prices may crash.

 

Direct Cash Transfer is Unscientific (Deccan Herald)

Old Diet, New Recipe (by Sebastian P.T., Business Today)

more
Former Directors:

Sharad Pawar (May 2009 – January 2011)

India’s Agriculture Minister Sharad Chandra Govindro Pawar was Minister of Consumer Affairs and Public Distribution between May 31, 2009 and January 19, 2011.

 

Pawar was born on December 12, 1940 in Baramati, a sugar-producing region, in Maharashtra’s Pune district. Pawar comes from a land-owning family. He is a member of the Maratha caste.

 

Pawar was first elected to the Maharashtra Assembly in 1967. He went onto become Maharashtra chief minister four times but never completed a full five-year term. Pawar has been elected to the Lok Sabha seven times and has been leader of the opposition once. He currently represents the Madha parliamentary constituency in the Lok Sabha.

 

Pawar is considered a shrewd political operative. In 1998, onion traders from Maharashtra starved New Delhi of onions, leading to a shortage. The crisis reportedly led to the ruling BJP losing the Delhi Assembly losing elections. An investigation by the central BJP government led to raids on Maharashtra warehouses, where traders where found to be hoarding onions. Pawar is rumored to have engineered the artificial shortage.

 

Pawar was a Congress party member till May 1999, when he formed the Nationalist Congress Party (NCP), a splinter faction. NCP has been part of the two Congress-led central governments in 2004 and 2009. Though it was expected to merge with the Congress, it has so far stayed independent, a part of Pawar’s political strategy to extract more mileage, say observers.

 

He also has vast administrative and legislative experience. From 2004 onwards he has been a Union Minister of Agriculture and Consumer Affairs and Public Distribution with a short break in May 2009 when he was again elected and continued to hold the same portfolios. In a minor reshuffle of the Union cabinet in January 2011, he lost the Consumer Affairs and Public Distribution ministry but was given Food Processing Industries.

 

Pawar continues to have active business and political interests in Maharashtra. In the Congress-NCP coalition government in Maharashtra, his nephew is the deputy chief minister while his only child, Supriya Sule, is a Rajya Sabha member.

 

Widely respected, Pawar has never been caught in a corruption scandal though there have been many unsubstantiated allegations. He has managed to maintain a clean record despite having friends and family members with alleged wrongdoings.

 

In November 2011, Pawar made headlines when he was slapped by Harvinder Singh.  Singh, who previously slapped former Telecom Minister Sukh Ram, became a minor Internet celebrity after the release of the Chamaat Song (Slap Song). The tune borrowed the music from a popular Tamil film song and remixed to celebrate Singh’s assault.

 

Official Biography

Sharad Yadav (July 2002 - May 2004)

Sharad Yadav served as the Union Minister for Consumer Affairs, Food and Public Distribution from July 01, 2002 to May 15, 2004. He is a member of Janta Dal United and represents Madhepura constituency of Bihar in the current Lok Sabha. Apart from being the Food minister, he was Union minister for Civil Aviation and Union Minister for Labor.

 

Official Biography

 

 

more

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Founded: 1984
Annual Budget: Rs. 76267.16 crore ($13.87 billion USD)
Employees: 134
Official Website: http://dfpd.nic.in/
Department of Food and Public Distribution
  • Latest News
Bookmark and Share
Overview:

The Department of Food and Public Distribution oversees India’s food security by supplying subsidized grains, sugar and kerosene to eligible families. It also creates policies related to the sugar industry and the import/export of grains, sugar and edible oils.

more
History:

India’s public distribution system (PDS) began prior to Independence. In 1939, rationing was first introduced in Bombay by the British Government to ensure equitable distribution of food grains in urban areas at a time of rising prices. Rationing, therefore, served as a precursor to latter policies of stabilization and management of food grains.

 

The government under British rule first established a food agency, the Food Department, in December 1942, which created the All India Basic Plan to deal with issues such as procurement, contracts for purchasing agents, public distribution, inspection and storage.

 

Food shortages following independence, particularly in the 1950s, led to the importation of food grains from the United States. With the Green Revolution in the mid-1960s, India set out to establish food self-sufficiency, which entailed new efforts in food grains management. These included fairer prices for farmers and control of market prices and public distribution of essential commodities.

 

In 1965, the Food Corporation of India was established to function as an autonomous organization to handle the purchasing, storage, movement, transport, distribution and sale of food grains and other food stuff.

 

But it wasn’t for another two decades that the government of India created a cabinet-level authority to oversee PDS. In 1984, the Ministry of Food and Civil Supplies was established with two departments: the Department of Food and Department of Civil Supplies.

 

The original purpose of PDS was to stabilize food prices in a few urban areas, but it evolved into a poverty alleviation program with a specific goal of food security for India’s poorest families. Initially, the PDS was universal - available to all.

 

By 1992, the government revamped the system, limiting it to primarily drought prone, tribal and hilly, and remotely located area. Still it was available to everyone in the designated areas. 

 

Five years later, Targeted PDS was developed for families living below the poverty line (BPL) throughout the country.

 

The Indian Public Distribution System As A Provider of Food Security (by Alessandro Tarozzi, European Economic Review)

Performance Evaluation of Targeted Public Distribution System (Programme Evaluation Organisation, Planning Commission, Government of India)

more
What it Does:

The Department of Food and Public Distribution is responsible for India’s food security. It manages food supply through procurement/distribution of food grains, maintains food stocks, and monitors their movement and delivery through distribution agencies. Public Distribution System reaches the following household categories:

 

Antyodaya Anna Yojna

Launched in December 2000, Antyodaya Anna Yojna is focused on the Targeted Public Distribution System. It is for the poorest of the poor from Below Poverty Line (BPL) families. Recipients received up to 35 kg subsidized food grains per month. States/Union Territories cover distribution and transportation costs. 

 

Below Poverty Line

Below Poverty Line is a poverty threshold indicating economic disadvantage used to identify individuals and households that need government assistance. This threshold varies by rural versus urban, by state and within the state and is based on the Tenth Five-Year Plan (2002–2007) survey.

 

Criteria for programs implemented by the Government of India are:

 

  • Rural areas: Degree of deprivation according to certain parameters, with scores from 0-4: landholding, type of house, clothing, food security, sanitation, consumer durables, literacy status, labor force, means of livelihood, status of children, type of indebtedness and reasons for migrations.
  • Urban areas: Degree of deprivation in respect of seven parameters: roof, floor, water, sanitation, education level, type of employment, and status of children in a house.

 

State governments are free to adopt any criteria/survey for state-level schemes.

All recipients received up to 35 kg subsidized food grains per month.

 

Above Poverty Line Ration Cardholders

Food grain allocation depends on the availability in the Central Pool and past taken by the State/Union Territory. It ranges between 15-35 kg per family per month.

 

The department also enacts an edible oil management plan for quality control and ensuring availability of this oil at reasonable prices.

 

The department aids farmers by purchasing a predetermined amount of grains at rates determined by the government, the Minimum Support Price.

 

The department also formulates policies for the sugar sector such as fixing fair prices on sugarcane, ensuring a steady supply of sugar for PDS and fixing levy prices of sugar. It ensures development of sugar and sugarcane by advancing loans to the sugar industry from Sugar Development Fund.

 

The department creates policies related to import/export of food grains, sugar and edible oils.

 

Attached or Autonomous Bodies

Central Grain Analysis Laboratory (CAGL)

The Central Grain Analysis Laboratory is a premier lab that helps the ministry in establishing the standards for kharif and rabi crop procurement for the Central Pool. It serves to monitor and lay guidelines for the time of food grain procurement, storage conditions and subsequent distribution of the same by working closely with the Food Corporation of India. The organization is majorly involved in monitoring the quality and establishing specifications for procurement, import and export of the food grains. It also acts as a watchdog for monitoring the food grain quality under the Prevention of Food Adulteration Act.

 

National Sugar Institute (NSI)

A premier institute setup by the government of India in 1936, NSI is closely associated with the sugar and other allied industries, dedicated to promoting research, provide training to personnel and give technical backup to industries. It also sets up standards for sugar in India. It also offers postgraduate courses in sugar technology, sugar engineering, and industrial fermentation and alcohol technology. It also helps the sugar industry by providing research into the problems that are faced by factories.

 

Indian Grain Storage Management and Research Institute (IGMRI)

IGMRI has been set up in the year 1958 at Hapur with the objective of researching into the reasons and the extent of food grain losses happening due to crop infestation by insects, rodents and birds. It is also entrusted with the responsibility for development of standards for storage of grains and suggesting cost effective methods for their handling. It also carries out the research into the post harvest activities that are required for handling and storage of grains. IGMRI has field stations located in Ludhiana, Hyderabad, Jabalpur, Udaipur and Jorhat.

 

Quality Control Cells (QQC)

The Quality Control Cells help various state agencies in ensuring the procurement of good quality food grains. In addition, it also helps in checking the quality during storage and distribution of food grains such as rice, wheat etc. It acts as an enforcement agency in assuring that the government guidelines for the storage of grains are strictly followed by FCI, CWC and other state agencies. It also conducts investigations and inspections based on the complaints received and suggests the actions that are required. There are eight Quality Control Cells.

 

Directorate of Sugar

The directorate, set up as an attached office to the ministry, serves to ensure the implementation of policies that are concerned with the production, distribution and consumption of sugar in the country. It maintains statistical data on the production and consumption of sugar in the country. It monitors the establishment and expansion of new and existing sugar mills. It also releases the monthly levy and non-levy quota of the PDS and for sale in open markets.

 

Directorate of Vanaspati, Vegetable Oils and Fats (DVVOF)

The directorate was set up as an attached office to the ministry to ensure coordinated management of oils, especially edible oils. It severs to monitor the oil production in the country and adjust import duties accordingly. It strives to ensure the availability of oil in the market and to stabilize the oil prices in the county. The directorate also monitors the quality of the edible oils and it has an extensive laboratory setup to do so. It also carries our research in augmenting the quality of vegetable oils available in the market.

 

Central Warehousing Corporation (CWC)

Initially started in 1957, CWC aimed at providing logistical support to the agricultural sector of the county. Presently, it offers logistical and warehousing solutions to a multitude of public and private enterprises. It runs over 450 warehouses that store various notified commodities including agricultural commodities and provide for logistical support in transferring them. It has storage facilities for storage of more than 400 commodities. It also offers training and consultancy services for setup of warehouses. It is entrusted to act as the agent of government for purchase of agricultural produce.

 

Food Corporation of India (FCI)

In order to implement the objectives of the National Food Policy, FCI was setup in 1965 with the objective of price support to farmers and safeguard the interests. It also is responsible for the distribution of food grains via PDS. It is also responsible for monitoring and maintaining adequate minimum stock of food grains. FCI intervenes in the market to stabilize the food grain prices as may be required. Based on the need and stocks of food grains, FCI decides the sale and purchase of various grains.

 

Hindustan Vegetable Oils Corporation Ltd. (HVOC)

The operations of HVOC were suspended in June 2011 due to continued erosion of capital and losses. The company had eight units, which were engaged in the manufacture of Vanaspati Oils, refining and packing of edible oils. It also manufactures cornflakes and oats. HVOC’s Breakfast Foods Unit is the only operating unit of HVOC engaged in the manufacture of cornflakes and oats.

 

National Cooperative Consumers’ Federation of India Limited (NCCF)

Setup in the year 1965, the federation serves to act as a nodal point for providing supply support to state co-operatives and various agencies involved in the distribution network of food grains. It also provides technical assistance to co-operatives during the whole cycle of procurement, transport, storage, accounting and other necessary activities in order to improve the operating efficiencies. It also spreads awareness for the development of consumer co-operative movements in the country.

 

Institute of Food Security (IFS)

The Institute was established by the Food Corporation of India to expand on the knowledge about Food Security in India. It provides trainings to the personnel of the FCI. It strives to work on enhancing the knowledge and skill sets of FCI’s executives. It develops internal training programs for the FCI and provides trainings to corporate and other agencies on the topics of food security on a contractual basis. IFS is country’s premier Institute for advance learning on the topic of food security.

 

Warehousing Development and Regulatory Authority (WDRA), New Delhi (WDRA) WDRA acts an apex agency that caters to the implementation and regulations of the Warehousing Act, 2007. It looks after the development of new warehouses, regulatory processes and approvals for setup of new warehouses and to promote holistic growth of warehousing business. It also regulates the rates and other terms and conditions that are offered by warehousemen. It also arbitrates in the case of dispute between the warehouse and warehouse receipt holder.

more
Where Does the Money Go:

The department has been allocated net outlay of Rs.76267.16 crore ($13.87 billion USD) in 2012-13. A major portion of the budget allocation to the Department of Food and Public Distribution is for subsidies.

more
Controversies:

Food Rots in Government Warehouses, Millions Go Hungry

As of January 1, 2010, a Right to Information (RTI) inquiry showed that 10,688 lakh (1.07 billion) tons of food grains were found damaged in Food Corporation of India (FCI) depots, enough to feed over six lakh (600,000) people for over 10 years.  This isn’t the first instance. From 1997 to 2007, 1.83 lakh (183,000) tons of wheat, 6.33 lakh (633,000) tons of rice, 2.20 lakh (220,000) tons of unmilled rice and 111 lakh (111,000) tons of maize were damaged in various FCI godowns (warehouses).

 

In 2012, food grain still rotted in the country while millions remained hungry. One hundred kilometers from Union food minister K. V. Thomas’ hometown of Kochi, Kerala, 2,500 tons of wheat rotted in a warehouse. In the northern state of Punjab, considered India’s breadbasket, 6 million tons of grain worth at least $1.50 billion USD would go to waste. There are also reports of decomposing wheat in an area the size of a football field and as high as a house. The wheat has been there five years.

 

While India has bumper crops of wheat, its citizens starve. Many blame insufficient infrastructure and government apathy. Storage capacity hasn’t been upgraded in 25 years so wheat is officially stored outside. There aren’t enough sacks and tarps.  Grains are left exposed to the elements or minimally covered by a single piece of plastic. 

 

One proposed solution would be to distribute excess grain or release it via the Public Distribution System (PDS).  However, Pranab Mukherjee, the former Finance Minister, rejected this idea citing fiscal constraint. Distribution was estimated at an additional Rs. 5,000 crore ($923.19 million USD). Instead, the government this year permitted the export of up to 4 million tons of non-basmati rice.

 

Food Grains Rot in FCI Godowns Across India (Hindustan Times)

Rotting Foodgrain a Shame (India Today)

As Crops Rot, Millions Go Hungry in India (by Mayank Bhardwaj, Reuters)

Rajasthan: Grain Rot Continues Amidst Govt Apathy (by Swati Vashishtha, CNN-IBN)

Rotting Grain Adds To India's Food Problem (by Tanushree Sharma Sandhu, DW)

more
Suggested Reforms:

Enact a Universal PDS

PDS is supposed to bring food and fuel to the poorest in the country. But India is unable to target the right households. In 2004-05 the National Council of Applied Economic Research (NCAER) and the University of Maryland found that only 48% of the poor had access to BPL cards while 31% of the non-poor households HAD access to BPL cards. One solution is a universal PDS to ensure that the subsidized food reaches to those who need it the most. A universal PDS would be revamped to distribute more nutritional grains such as millet instead of wheat and sugar. 

 

India also faces rapid inflation on food prices. The week of February 6, 2010 food prices rose nearly 18%, making may daily items harder to afford. The Centre for Budget and Governance Accountability (CBGA) suggested that funneling affordable food grains via a universal PDS would bring down food prices. 

 

Universal PDS can Fix the Problem of Malnutrition (by Sonalde Desai, The Economic Times)

Is Universal PDS a Good Idea? (by Thiruvoipati Nandakumar, Indian Express)

The Task of Making the PDS Work (by Jean Dreze, The Hindu)

Universal PDS Only Way to Beat Hunger, Tackle Price Spiral? (by Subodh Varma, Times of India)

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Debate:

Direct Cash Transfer Instead of PDS Ration

Background

A Delhi government pilot program funded by the United Nations Development Programme (UNDP) was testing the viability of direct cash transfers and also was an attempt to circumvent the corrupt PDS. The government is contemplating introducing direct cash transfer program in many cities and towns.

 

Raghubir Nagar, a resettlement neighborhood in West Delhi was selected as the first urban trial for giving cash instead of PDS rations. In 2011, households there received Rs. 1,000 ($18.41 USD) monthly in a female family member's bank account in lieu of rice, wheat, sugar and kerosene at subsidized rates.

 

Pro-Direct Cash Transfer Instead of PDS Ration  

Individuals with “below the poverty line” (BPL) ration cards are entitled to receive a certain amount of grains, sugar and kerosene per month. These items can only be picked up at the PDS shop, which many times is not open when it’s supposed to be. Also, supplies are often inferior quality and/or not full amount. Many supplies are siphoned off and sold on the black market. The Planning Commission estimate that 58% of subsidized food grain does not reach the intended beneficiaries. A direct cash transfer frees recipients to shop at wholesale markets, obtain better quality food, and not be at the mercy of the PDS shop.

 

Poverty Ridden Opt for Cash Transfer over PDS (by Prasad Nichenametla, Hindustan Times)

 

Anti-Direct Cash Transfer Instead of PDS Ration

The National Federation of Indian Women (NFIM) is concerned that direct cash transfers will reduce transparency of the economy and that funds will be misused by other family members. On a wider economic scale, there is worry that without PDS, the government will have a surplus of the food grain that was allocation for distribution. And since the government buys the grain at a minimum price per year, with a surplus, food grain prices may crash.

 

Direct Cash Transfer is Unscientific (Deccan Herald)

Old Diet, New Recipe (by Sebastian P.T., Business Today)

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Former Directors:

Sharad Pawar (May 2009 – January 2011)

India’s Agriculture Minister Sharad Chandra Govindro Pawar was Minister of Consumer Affairs and Public Distribution between May 31, 2009 and January 19, 2011.

 

Pawar was born on December 12, 1940 in Baramati, a sugar-producing region, in Maharashtra’s Pune district. Pawar comes from a land-owning family. He is a member of the Maratha caste.

 

Pawar was first elected to the Maharashtra Assembly in 1967. He went onto become Maharashtra chief minister four times but never completed a full five-year term. Pawar has been elected to the Lok Sabha seven times and has been leader of the opposition once. He currently represents the Madha parliamentary constituency in the Lok Sabha.

 

Pawar is considered a shrewd political operative. In 1998, onion traders from Maharashtra starved New Delhi of onions, leading to a shortage. The crisis reportedly led to the ruling BJP losing the Delhi Assembly losing elections. An investigation by the central BJP government led to raids on Maharashtra warehouses, where traders where found to be hoarding onions. Pawar is rumored to have engineered the artificial shortage.

 

Pawar was a Congress party member till May 1999, when he formed the Nationalist Congress Party (NCP), a splinter faction. NCP has been part of the two Congress-led central governments in 2004 and 2009. Though it was expected to merge with the Congress, it has so far stayed independent, a part of Pawar’s political strategy to extract more mileage, say observers.

 

He also has vast administrative and legislative experience. From 2004 onwards he has been a Union Minister of Agriculture and Consumer Affairs and Public Distribution with a short break in May 2009 when he was again elected and continued to hold the same portfolios. In a minor reshuffle of the Union cabinet in January 2011, he lost the Consumer Affairs and Public Distribution ministry but was given Food Processing Industries.

 

Pawar continues to have active business and political interests in Maharashtra. In the Congress-NCP coalition government in Maharashtra, his nephew is the deputy chief minister while his only child, Supriya Sule, is a Rajya Sabha member.

 

Widely respected, Pawar has never been caught in a corruption scandal though there have been many unsubstantiated allegations. He has managed to maintain a clean record despite having friends and family members with alleged wrongdoings.

 

In November 2011, Pawar made headlines when he was slapped by Harvinder Singh.  Singh, who previously slapped former Telecom Minister Sukh Ram, became a minor Internet celebrity after the release of the Chamaat Song (Slap Song). The tune borrowed the music from a popular Tamil film song and remixed to celebrate Singh’s assault.

 

Official Biography

Sharad Yadav (July 2002 - May 2004)

Sharad Yadav served as the Union Minister for Consumer Affairs, Food and Public Distribution from July 01, 2002 to May 15, 2004. He is a member of Janta Dal United and represents Madhepura constituency of Bihar in the current Lok Sabha. Apart from being the Food minister, he was Union minister for Civil Aviation and Union Minister for Labor.

 

Official Biography

 

 

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Founded: 1984
Annual Budget: Rs. 76267.16 crore ($13.87 billion USD)
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Official Website: http://dfpd.nic.in/
Department of Food and Public Distribution
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