Explain how food grain buffer stock policy of the government is deviating from meeting its intended objectives and suggest some measures required in this regard.

The Central Government maintains food stocks commensurate with the requirements of foodgrains for supply through the PDS and to take care of short fall in production or natural calamities.

• Multiple objectives: Buffer stocking is used simultaneously to provide food security, tackle the problem of volatility in the price of food grains and to achieve the objectives of ensuring remunerative price to farmers.

These objectives often conflict with each other, leading to inefficiencies in buffer-stocking operations and falling short in terms of intended deliverables.

• Pro-cyclical nature of procurement: The food gain policy is supposed to be counter-cyclical in nature i.e., to procure grains in times of abundant supply in the market and release in times of scarcity. However, government often withhold the stocks during a bad crop year expecting the off-take to be higher than normal, which results in pushing up prices in an already supply-constrained market.
• Low off-take of open market sales: High selling price, poor quality of food grains and ad hoc nature of open market sale scheme (OMSS) often results in low off take. Example: The Government had to repeatedly reduce reserve prices under OMSS (2023) to encourage private procurement and moderate wheat prices.
• Rising cost of operation: High acquisition costs owing to rising MSPs and higher bonuses given by some states over and above the MSPs. Some states (e.g., Punjab and Chhattisgarh) also provide bonuses over MSP, further increasing procurement costs.
• De-facto Nationalisation of the Grain Market: High MSPs and Openended procurement of the government strangled private sector participation in the Indian grain market.

Measures to be taken:

• Introduce automatic procurement and release triggers linked to production, prices and buffer norms.
• Replace the ad hoc approach to OMSS and export policy with predictable, rule-based mechanisms.
• Discourage procurement of surplus grains supported by state-specific MSP bonuses.
• Promote Negotiable Warehouse Receipts (e-NWRs) so farmers can store produce and sell later, reducing procurement pressure on FCI.
• Expand Decentralised Procurement (DCP) to more states and diversify procurement towards pulses, millets and oilseeds.
• Adopt scientific inventory management to maintain stocks close to prescribed buffer norms.

The above reforms in food grains stock management are necessary to reduce the gap between per-capita production and per-capita availability of food grains and their equitable distribution.