Amidst farmer distress and food security issues, Shanta Kumar Committee was formed in 2014 for restructuring the working of food procurement and distribution system, preferably FCI. The article is intended to give an insight into the important highlights of the mentioned recommendations by the committee.
India is a developing economy with a large portion of the workforce engaged in the agrarian sector catering to the demanding needs of the nation's nutrition. While becoming the producing nation from an importing one, the Indian agricultural system has seen various changes and implementations to support producers and the consumers. In the process to streamline the operational efficiency of the agricultural sector, the Shanta Kumar Committee was formed to form the road-map to cater to the increasing needs of the people.
Highlights of the committee
The procurement responsibilities should be divided between the Food Corporation of India and the States, such as Punjab, Madhya Pradesh, Chattisgarh, Andhra Pradesh, and Odisha, which have got enough experience in the procurement business. FCI, on the other hand, should shift its focus to the other States in distress in terms of food security and farmers' dissatisfaction.
The statutory levies should be brought under the maximum cap of 4 percent of minimum support price in all States to impose the uniform levy base.
The quantity and quality standards should be met and no extra grains should be accepted in the central pool beyond the needs of the states. The quality standards should be thoroughly monitored before the inclusion of grains, by the government or the third party.
Levy on rice mills should be terminated. In the current scenario, 25 percent of the produce from the mills is being procured by the government for the public distribution system and the rest is left to the mills for their own selling.
Negotiable Warehousing Receipt System should be encouraged under which, after moving the produce to government warehouses, the farmers would be eligible for having 80% of the payment from the bank at MSP. If they feel they can sell the produce at a better cost, then they can get back their produce too. This move will encourage the private players and the government too, to set up good warehouses.
The focus should be imparted equally to commodities other than wheat, as there are 23 commodities in the MSP basket including pulses and oil-seeds. The insufficient procurement of these items as compared to food grains results in discouragement to grow these items, which is inevitable. Furthermore, unchecked trade policy leads to the import of pulses and oil-seeds below MSP.
The limit of coverage of households for subsidized food should be reduced from 70 percent of households to 40 percent of households to fulfill the requirement of 7kg/person of BPL families against the current figure of 5kg/person.
The advance ration for 6 months should be supplied to the beneficiaries immediately after the procuring season and, for the domestic storage, the bins should be provided to the consumers.
The cash transfer scheme should be organized in the PDS to plug leakages in PDS and improve the nutritional base of consumers. The process should be started as a pilot project in line with international practices.
The storage of the buffer stock should not exceed the norms to reduce the storage expenses. The government should set up the liquidation of stocks to export or other practices to take off the extra buffer stocks.
The departmental workers should be replaced with contract laborers to reduce the labor charges as the incentives given to the former lead to the high employee cost of 7 times the latter.
The fertilizer subsidies should be replaced with cash transfer of about, 7000 rupees per hectare to the producer as the unequal subsidy has been levied upon Urea (Nitrogen), Phosphorus, and Potassium contents respectively. This leads to the imbalance in the use of fertilizers that further leads to soil and environmental degradation.
Discussions from an exam view
From the IAS examination point of view, the various facets of this topic should be observed, such as the history and the role of Food Corporation of India. The buffer stocks are mentioned, so the readers are advised to find out the current norm of the buffer stock. The operational insight of the Public Distribution System is also to be noted, that is, how the Center and States jointly work for this endeavor. Further, the Levy rice is the term used in the article and is advised to be noted. Finally, the minimum support price or MSP is a highly important subject to be discussed and is deemed to be conveyed through other resources, its benefits, and its significance.
The readers are advised to critically examine the Shanta Kumar Committee and understand the implications of the recommendations if applied; like the effects when fertilizer subsidy is repealed or the cash transfer switch from the physical commodities transfer implications. The historical implication can also be referred to. For example, the pilot project was started as a Direct Cash Transfer scheme so the results are to be noted to examine the case. Furthermore, if there are any related international practices then they should be referred to, as well. It is from the subjective point of these things that the various aspects have to be uncovered by the readers with their creativity at disposal.
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