FOOD SECURITY AND STORAGE

Food and Civil Supplies Food Security Act Provides for food & nutritional security By ensuring access to adequate quantity of quality food at a affordable prices Tow-third of the population to get subsidized food grains under TPDS Pregnant and lactating women 1000/month for 6 months Department of Food and Public Distributor Responsible for management of food economy of the nation via PDS, MSP, ensuring availability of food grains via buffer stock, food grains accessible at fair prices. Production of food grains Wheat 2011-12 Procurement Wheat 2012-13 Computerized PDS Via 12 FYP on cost sharing basis between states and center Via NICs application software which is Aadhar enabled Stock Position Food grains 805 LT (wheat 498 LT + Rice 307 LT) prescribed buffer norms Wheat 201 LT + Rice 118 LT 2012s stock > 2011s by 25.7% 1 381 LT Rice 346 LT 902 LT Rice 1034 LT

Distribution 2011-12 2010-11 567 LT 530 LT

April 2011 March 2012 was 431 LT (243 Rice + 187 Wheat) Open Market Sale Scheme (OMSS) FCI sells wheat at pre determined prices in the open market to increase supply of wheat during lean season. Wheat and Rice are also allocated to State Governments for retail sale via non-PDS channels under OMSS. Wheat October 2011 September 2012 i) 10 LT of wheat allocated to states for distribution to retail consumer ii) 15 LT for tender sale by FCI to bulk customers + small private traders 2012-13 wheat sold via OMSS 1.94 LT Rice January 2011 September 2011 i) 10 LT allocated to states October 2011 September 2012 i) 10 LT for distribution to retail consumers 2011-12 Rice via OMSS 0.19 LT TPDS since 1997 To ensure availability of minimum quantity of food grains to the families BPL Intended to benefit 6 Cr poor families 72 LT of food grains per year at 10 kg per family per month 2

April 2000 Allocation increased to 20 kg July 2001 Allocation increased to 25 kg April 2002 Allocation increased to 35 kg As per availability BPL and AAY families get 35 kg/month APL 15-35 kg/family/month Central Issue Price (CIP) for BPL 4.15 per kg for wheat and 5.65 per kg for rice Food grains under TPDS Year 2010-11 2011-12 Allocation 475 LT 488 LT Distributed 437 LT 431 LT

Antyodaya Anna Yojana (Dec.2000) (1 Crore families) To make TPDS more focused and targeted towards the poorest sections, identified poorest of the poor from the BPL covered under TPDS. 2/kg for Wheat and 3/kg for rice

States to bear distribution cost and transportation cost since entire food subsidy gets passed to the consumers under the scheme. In 2002, 25 kg/family/month increased to 35 kg/family/month, which increased to include 2.5 Cr families. Other Welfare Schemes 1) Mid-day Meals Scheme (MMS) was started in 1985 by Ministry of HRD in 2408 blocks for students in 10 schools to enhance enrolment, retention, attendance and to increase the nutritional levels. In 1997-98, it increased to all the blocks. Classes I-VIII of Government schools and Government aided schools, Education Guarantee Scheme (EGS) and Alternative Innovative Education Centres (AIE). 3

Department of food and public distribution allocates food grains. Allocation Year 2012 Rice 22.29 LT Wheat 4.84 LT Total 27.13 LT

2) Wheat Based Nutrition Programme (WBNP) was started by Ministry of Women and Child Development. Food grains allotted under WBNP are utilized by states under ICDS for providing nutritious food to children < 6 yrs and expecting or lactating women. Allocation Year 2011-12 Rice 565 LT Wheat 9.52 LT Total 15.17 LT

3) Rajiv Gandhi Scheme for Empowerment of Adolescent Girls (RGSEAG) SABLA was started in 2010 by Ministry of WCD. SABLA scheme = merging of NPAG (Nutrition Program for Adolescent Girls) + KSY (Kishori Shakti Yojana) Empower adolescent girls (11-18 yrs) by increasing nutrition and health status, 100 gm of grains per day for 300 days in a year. Allocation done for first time in Year 2011-12 Rice 1.57 LT Wheat 1.16 LT Total 2.73 LT

4) Scheme for supply of food grains to welfare (not covered under TPDS) institutions Adult allocation of food grains <= 5 % of the BPL allocation at BPL prices. Year 2011-12 Rice 1.56 LT Wheat 0.53 LT Total 2.09 LT 4

5) Scheme for supply of food grains for SC/ST/OBC Hostels was started in 1994 by department of F&PD, hostels with two-third students in SC/ST/OBC; 15kg of food grains/president/month Year 2011-12 Rice 0.99 LT Wheat 0.25 LT Total 1.24 LT

6) Annapurna Scheme was started in 2000 by Rural Development, where senior citizens (65 or >) who are not getting pension under National Old Age Pension (NOAPS) are covered in this scheme. 10 kg food grains/person/month is provided free of cost. In 2002 the scheme is transferred to State Plan along with the National Social Assistance Program (NOAPS+ National Family Benefit Scheme). Food grains were provided to State Government at BPL rates. Year 2011-12 Rice 0.64 LT Wheat 0.32 LT Total 0.96 LT

7) Emergency Feeding Programme (EFP) was started in 1995, a food based intervention targeted towards old, infirm, destitute persons belong to the BPL sections. It provides them fund security at distress time initially started at Odisha. Rice is at BPL rate, allocated to State Government since 2001. In 2011-12 allocated 0.18 LT rice. 8) Village Grain Bank Scheme (VGBS) was earlier implemented by Management of Tribal Affairs in 11 states, post 2004 Department of F&PD implemented to provide safeguards against starvation during natural calamities. Grain banks were set up in food scarce areas and those villages were to be identified by State Government. SHGs, Village Panchayats, Gram Sabhas are eligible to run Grains Banks. Cost of setting up one grain bank is 91, 792. STORAGE AND BUFFER STOCKS Total Storage with FCI is 302 LT Cover and Plinth (CAP) storage (owned (26 LT) & hired (7 LT)) CAP with states = 137 LT 5

Therefore, total capacity for storage of food grains = 627 LMTs Private Enterprises Guarantee Scheme (PEG) It is via PPP model to create storage space. Plan scheme by FCI in N.E States It is to increase production and procurement and to decrease storage in CAP. Private Enterprises, Central Warehousing Corporation (CWC) and State Warehousing Corporation is involved in godown construction. FCI gives a guarantee of 10 yrs for assured 152 LT to be created in 19 states under PEG. For NE states, 54 LMt of storage space is being created, 5000Mt is already constructed at Hailak (Assam). Three agencies in the public sector build storage, FCI-food grains, CWC and 17 SWC food grains and other items Problem Areas 1) Lack of integrated cold chain facilities 23 Mn.Mts= total available. But India can store <11% of what is produced . Outdated technology, single commodity based (potatoes) 2) Lack of refrigerated vehicles for perishable items (except milk), though 25 K vehicles + 250 operators are available and 80% of them devoted to milk 3) Percentage of fruits and vegetables moved via cold storage in India is negligible. USA- 80-85%, Thailand 30-40% Government Initiatives 1) Infrastructure facilities and cold chain post harvest 2) RIDF (Rural Infra Development Fund) increased to 4bn$ (2012) from 3.5 bn$ (2011) 3) VGF Scheme extended for PPP projects to set up modern storage capacity

4) Air conditioned equipment and refrigeration panels for setting up cold chain facilities exempted from excise duty 5) Creation of additional 15 mn tones capacity of storage capacity via PPP 6) National Horticulture Mission sanctioned 24 cold storage projects with a capacity of 1, 40,000 MT 7) Additional 107 cold storage projects (5, 00, 000 MT capacity) approved by National Horticulture Board 8) No service tax for the initial set up and expansion of cold storage 9) No customs duty for manufacturing of refrigerated vans 10) Food processing incentivized via improved availability of storage and warehouse facilities for agriculture products 11) 15 more Mega Food Parks 12) States asked to reform the Agricultural Produce Market Committee Act to improve supply chain 13) PEG Scheme - for new godowns, 150 LMt approved across 19 states Buffer Stock Price stabilization in India is achieved via Buffer Stock & Imports Food grains in the Central Pool is 55.2 MT 31 MT Rice, 24 MT Wheat, adequate for meeting TPDS demands. In 2012, Minimum Buffer Norms Wheat 112 LT, Rice 138 LT, Total 250 LT Actual Buffer Norms Wheat 256 LT, Rice 297 LT, Total 553 LT 7

Storage Capacity of State Agencies and CAP is 627 LMTs State wise Approved Maximum storage Punjab 1.5 LMt CWC operates in Gujarat, Kerala and Uttar Pradesh FCI operates in Himachal Pradesh, Jammu & Kashmir, Jharkhand, Tamil Nadu (60000 LMt) and Uttarakhand Food Processing India is the third largest producer of food in the world, after China and USA FPI is the 5th largest industry in India, with 135 bn $ and estimated to grow with a CAGR of 10% to reach 200 bn $ by 2015 Different sectors are involved like, diary, fruit and vegetables, grains, oil seeds and pulses, packaged foods Ministry of Food Processing Industries (MFPI) was set up in July 1988. It acts as a catalyst for bringing in greater investment, creating a conducive environment for healthy growth of food processing industry. It also minimize wastage, induce modern technology, provide policy support and create critical infrastructure. Vision 2015 on FPI To reduce the wastage quotient in the processing of perishables To set a target of tripling the size of the processed food sector To increase the level of processing of perishable food from 6 to 20% To increase the level of value addition from 20 to 35 % To increase the level of share in global market from 1.6 % to 3 % To increase the level of processing of fruits and vegetables from 2.2 to 15% (2015) Financial assistance in the form of grant-in-aid of 50% of the total cost of plant and machinery and technical civil works in general areas. 8

75 % for N.E Indian regions and different areas, subject to a maximum of crore Integrated Food Law Food Safety and Standards Act 2006 Remove multiplicity of food laws and regulatory agencies Provide single windows access to food processing sector Implemented via Ministry of Health and Family Welfare

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National Institute of Food Technology Entrepreneurship and Management (NIFTEM) Head Office is located at Kundli (Haryana) Functions as a knowledge centre in food processing Mega Food Park Schemes (MFPS) 10th plan scheme of Food Parks renamed as the MFPS in 2008 Launched with the objective of implementing the objective of vision 2015 via creation of excellent infrastructure 13 MFPS implemented, 30 MFPS approved 11th FYP aimed to set up 30 MFPS 12th FYP aims to set up 50 MFPS Objectives of MFPS 1) Provide State of the Art and Infrastructure for food processing on a pre identified cluster basis 2) Ensure value addition to agric commodities 3) Ensure a sustainable raw material supply chain for each cluster 4) Induction of latest technology 9

5) Quality Assurance via better process control and capacity building National Mission on Food Processing Central Scheme announced in the budget of 2012-13, aims at better outreach and provides more flexibility to suit local needs launched in co-operation with the State Governments. Sectoral Overview of FPI a) Fruits and Vegetables Positive growth for last few years Domestic consumption was low compared to processed food Smallness of units and their inability for market promotion reasons for inadequate expansion of domestic market In 2004-05 Government allowed 100% deduction of profit for first 5 years, for new upcoming fruits and vegetables processing units. 1901 lakhs released to 108 applicants b) Meat Processing grands in aid provided c) Consumer Food Industry Includes pasta, bread, cakes, noodles & biscuits Bread and Biscuits largest segment of consumer goods Indias biscuit industry a turnover of 3000 crores India is the second largest biscuit manufacturer after USA Bread and Biscuit 80% of baked product in India Biscuit unorganized sector of the baked industry covers 70% of total products Maharashtra, West Bengal, Andhra Pradesh, Karnataka & Uttar Pradesh major biscuit intakers 10

d) Alcoholic Beverages: Ministry of food processing responsible for alcoholic drinks from non molasses base and beer, including non alcoholic beer Ministry of financial support for setting up/modernization expansion of wine/beer units at 25% of the total cost of plant & machinery and technical civil work, subject to a limit of 50 lakh for general areas & 33% of plant & machinery and technical civil work to a limit of 75 lakh or difficult areas. e) Aerated Soft Drinks It is the third largest in packaged foods (Tea is 1st and Biscuit is 2nd) There are more than hundred plants, 1, 25, 000 employees Attracted a lot of FDI, has strong forward and backward linkages with glass, plastic, refrigeration, sugar & transportation industry Installed capacity of sweetened/aerated water is reported to be ~29.60 Lt/annum f) Packaged Drinking Water 218 companies granted license 80% sale comes from bulk container (5L and above)

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