Food Bill’s fine, but what about storage?

The National Food Security Bill 2013 has been passed by Parliament recently and awaits Presidential nod. The Bill envisages to provide food grains at subsidised rates to two-thirds of the population. Such provisioning will require an annual allocation of around 60 million tonnes of food grains and millets to meet the objectives of the Bill.

However, the Bill is noticeably silent on the implementation aspects. Lack of operational details will give teeth to the critics, who are only too keen to dismiss the objectives of the Food Bill as unrealisable.

One of the critical implementation tasks is to ensure efficient and effective transport of food grains from the producing to the consuming locations. However, planning or even talks of an efficient supply chain are absent in the public discourse.

The importance of such planning cannot be over-emphasised. It is of critical importance to insulate the the country’s food security from price shocks due to capricious international markets, as well as internal production volatility.

The current status of storage infrastructure and the foodgrain supply chain call for a lot to be done — both in terms of availability and quality — to achieve the goals of the Bill.

There is a need for a carefully planned strategy for efficient and effective storage and movement of foodgrains from surplus to deficit areas.

Poor storage facility

The current state of affairs of food procurement, storage and movement result in significant losses by way of damages and pilferages.

Traditional methods of storage, which involve storing over 90 per cent of government-procured food grains in 50 kg bags in open, closed, or covered warehouses, cannot reliably provide protection against dampness and pests.

Therefore, these are not suitable for long-term storage of food grains. Although the estimates vary in quantum, according to some accounts, the total losses stand at 8-10 per cent of total production of foodgrains every year.

Thus, there is a clear case for reducing such losses to offset the outgo in subsidies by more than a third by planning and implementing a food supply chain solution.

It may be noted that the subsidy Bill is estimated at Rs 90,000 crore (just below $15 billion at today’s exchange rates), of which Rs 10,000 crore is tagged as expenses towards its implementation in the first year. Annually, the Bill is expected to add Rs 25,000-35,000 crore thereafter.

The solution lies in designing a pre-emptive sophisticated supply chain and a modern, integrated food storage and transportation infrastructure.

The well-planned and implemented supply chain will help in assured foodgrains availability with reduced fiscal burden through:

Efficient procurement of foodgrains;

Reduced wastage through curtailed manual intervention and introduction of modern practices;

Ensuringgrain availability by providing long-term storage facility.

Handling foodgrains

Additionally, modern practices of storage and transportation reduce the need for land.

The need for a modern supply chain is of great importance in the Indian context, as producing and consuming locations are situated far away from each other.

For example, the northern States of Punjab and Haryana produce most of the surplus of wheat that needs to be transported to all parts of the country.

Also, the grains need to be handled multiple times for loading, unloading, bagging, un-bagging, transportation, and so on. Conventional handling of foodgrains in the present scenario opens up a large room for inefficiencies and could be saved by implementing modern practices in the supply chain.

Coordination among various arms of the Government — principally, the Ministries of Food & Agriculture, Finance, Railways — and the State governments, needs to be ensured.

To the government’s credit, some of the recent initiatives to spur investment in modern food storage are laudable. However, what is lacking is an integrated view of various elements of the supply chain to derive maximum benefit.

Therefore, there is an immediate need to put in place an integrated supply chain, spanning procurement, storage, movement and delivery of food grains.

The plan should be supported by an enabling policy, implementation and regulatory framework. Most importantly, the success of the plan will depend largely on the smooth coordination within the Government and their orientation towards a common goal. Frittering away this opportunity will deal a costly blow to the objective of eradicating poverty.

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