Central Pool foodgrain stocks at lowest in 5 years

Central Pool foodgrain stocks at lowest in 5 years

Subject: Economy

Section: Monetary Policy

Context:

• Rice and wheat stock in the Central Pool, managed by the Food Corporation of India (FCI), is at a five-year low, mainly due to lower procurement of wheat.
• Rice stock, though above 2020 level, may deplete fast in case there is a drop in production during current kharif season as paddy transplanting has dropped 12 per cent until last week.
• According to latest data, the rice and wheat stock as on August 1 was 545.97 lakh tonnes (lt), whereas the previous low was 499.77 lt in 2017.

The Food Corporation of India

• Food Corporation of India (FCI) is a Public Sector Undertaking, under the Department of Food & Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution.
• FCI is a statutory body set up in 1965 under the Food Corporations Act 1964. It was established against the backdrop of major shortage of grains, especially wheat.
  • Simultaneously, Commission for Agricultural Costs and Prices (CACP) was created in 1965 to recommend remunerative prices to farmers.
• It has primary duty to undertake purchase, store, move/transport, distribute and sell food grains and other foodstuffs.

Buffer Norms: 

• Buffer stock refers to a reserve of a commodity that is used to offset price fluctuations and unforeseen emergencies. It is generally maintained for essential commodities and necessities like food grains, pulses etc.
• The concept of buffer stock was first introduced during the 4th Five Year Plan (1969-74)
• The Cabinet Committee on Economic Affairs fixes the minimum buffer norms on quarterly basis: i.e. as on 1st April, 1st July, 1st October and 1st January of every financial year
• Food Stock available in the central governments’ pool is the stock held by:
  • State Government Agencies (SGAs)
  • States which are taking part in the Decentralised Procurement Scheme
  • Food Corporation of India(FCI)
• The stock of food grains in the Central pool is distributed all around the year depending on the off-take and procurement trends. Therefore, the season of production and procurement is a major factor to determine the minimum food grain stocks required in any particular quarter of the year.
• As of now, the stocking norms for buffer stock decided by the GoI comprises of:
  • Operational Stocks: The stock required to meet the monthly requirements under TDPS and OWS.
  • Food Security Stocks: The reserves to meet the procurement shortfall.
• The food grains for issue under OWS and TDPS are considered as operational stock, whereas the surplus is considered as buffer stock and operational stock both. The stock which is over the minimum stockpiling norms is treated as excess stock and it is exported from time to time, extra allocations for some states or through open market sales.

The pesky problem of offshoring pollution

• Every July, Singapore prepares to see its greenery vanish beneath a mantle of smoke. The haze from land-clearing fires drifts from Indonesia and Malaysia each dry season. But a recent study has revealed another source of air pollution from Singapore’s neighbours: heavy metals, such as chromium, from heavy industry.
• That pollution lasts all year round, posing a chronic risk to human health. It comes from what experts have described as ‘pollution havens’:developing Southeast Asian economies such as Indonesia, Malaysia and Thailand that are rapidly industrialising. They house the industries Singapore and other rich countries can afford to outsource.

What are Pollution havens?

• The Pollution Haven Hypothesis argues that firms will seek to avoid the cost of stringent environmental regulations (and high energy prices) by locating production in countries where environmental norms are laxer. In this context, the studies provide new reassuring evidence on the effect of energy prices on firms’ outward Foreign Direct Investment (FDI).