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.

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