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 β PDS food grains find way to market and all the lot donΥt 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.