Revamping Food Procurement, Procurement and Wadhwa Committee on PDS

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Revamping Food Procurement

Critical Policies in Ensuring Effective PDS

  • Minimum Support Price

  • Procurement

  • Distribution

MSP

Objective

To ensure that the farmers get a remunerative price for their produce

How Calculated

  • Looking at various factors including cost of production, cost of living, price parity etc

  • MSP was to be the last resort for the farmer

  • Declared for around 25 crops but are effective for virtually only wheat and rice and to some extent for coarse cereals

Why Are MSPs Revised Upwards?

  • Counter inflationary impact

  • Induce more cultivation of certain crops

  • Populist motivations

What Are the Consequences of Higher MSP?

  • Upward bias imparted to all prices as the MSP serves as the benchmark for all other product

  • Inflationary impact has hence been quite significant which raises issues on whether the farmers or consumers interests are of greater importance

  • Tendency for the cropping pattern to get skewed towards rice and wheat as the prices offered are high and the procurement system is also strong in certain states

  • MSP has hence evolved to become the first choice rather than the last resort.

Procurement

Motivations for Procurement by the Govt

  • To provide food security

  • Provide for the PDS

  • Stabilize prices

Build-Up of Stocks

Earlier the PDS was universal

Wadhwa Committee on PDS

Deficiencies of this System Are

  • Multiple ration cards being issued under a single name

  • Faulty system of issue and record keeping

  • Pilferage – PDS food grains find way to market and all the lot don’t reach the eligible/needy person

  • No bio-matric identification for the users

  • No central monitoring system to track the carriage trucks

  • The delivery mechanism has no RFID (Radio Frequency Identification Device).

Recommendations

  • Has suggested that PDS operations be computerized and human intervention be reduced to the extent possible, so as to check the diversions and leakages which plague the system at present.

  • If the disbursement to the beneficiaries in the State can be equated to the allocation to the state, there can be no diversion

  • Ration card database should be digitized and distribution to the beneficiary should be made after biometric identification

  • Integrate the different steps in allocation from Centre till the beneficiary so that there is no pilferage

  • Smart card and POS devise should be used

  • Monitoring the functioning of PDS operations through the use of information and communication technology should be given the highest priority

  • National Committee must be set up to lay down uniform standards for software components.