Schemes under The Department of Food and Public Distribution

THE Department of Food and Public Distribution is responsible for the management of the food economy of the nation. The vision of the department is to ensure food security for citizens of the country. To achieve this, the department has adopted missions such as efficient procurement at Minimum Support Price (MSP), storage and distribution of food grains; ensuring availability of foodgrains, sugar and edible oils through appropriate policy instruments; including maintenance of Buffer Stocks of foodgrains; and making foodgrains accessible at reasonable prices, especially to the weaker and vulnerable sections of society under a Targeted Public Distribution System (TPDS). 

The main instruments of the department’s food management policy are procurement, storage and movement of foodgrains, public distribution and maintenance of buffer stocks. 

Procurement of Food Grains 

Food Corporation of India (FCI), an autonomous organization of the department, with the help of State Government agencies, procures wheat, paddy and coarse grains in various states in order to provide price support to the farmers. Before each Rabi / Kharif crop season, Government of India announces the Minimum Support Prices (MSP), based on the recommendations of Commission for Agricultural Costs and Prices (CACP), which takes into consideration the cost of various agricultural inputs and the reasonable margin for the farmers for their produce. Sufficient number of procurement centres are opened by FCI/State Government agencies in mutual consultation before onset of procurement season, keeping in view the procurement potential and geographical spread of the state concerned. Review is made from time to time on the need for additional procurement centres, if any, during the procurement season and requisite additional procurement centres are also opened. State Governments are encouraged to adopt decentralised procurement (DCP) system of procurement so as to maximize procurement, reduce transportation and increase the reach of MSP operations. Under this system, state governments undertake procurement and distribution of food grains by themselves. Procured quantities in excess of state’s requirement are taken in the central pool for distribution elsewhere, while shortfall is met from the central pool. 

With the substantial increase in production of foodgrains in recent years in the country due to implementation of programmes like National Food Security Mission, Rashtriya Kisan Vikas Yojana, etc., and with an emphasis on bringing Green Revolution in eastern India, the procurement operations have expanded to many states due to which accumulated central pool stock of food grains had reached a record level of 805.16 lakh tonnes as on July 1, 2012 against the buffer norm of 319 lakh tonnes. Therefore, a balanced policy approach for procurement, distribution and disposal of food grains is now being adopted to provide adequate price support to the farmers, to have optimum level of procurement for meeting TPDS requirement, maintaining buffer stock and to dispose off surpluses without distorting the market in future. 

Stock of Food Grains in Central Pool 

The stock of food grains (rice and wheat) in the central pool as on July 1, 2014 was 674.61 lakh tonnes consisting of 276.60 lakh tonnes of rice including 64.24 lakh tonnes of Custom-Milled Rice (CMR) and 398.01 lakh tonnes of wheat. Though this stock is in excess of the prescribed norms for buffer stock, however, it is 64.44 lakh tonnes lower than the stock in central pool on July 1, 2013 and 130.55 lakh tonnes lower than the stock on July 1, 2012. This optimization of central pool stock and reduction of excess stock holding has been achieved through various policy measures which include generation of competitiveness in the domestic grain market through a balanced pricing of wheat for sale under Open Market Sale Scheme (OMSS), lowering of rate of imposition of levy for rice in certain states, streamlining of milling of paddy and enforcement of time schedule for delivery of CMR to FCI, liquidation of excess stock in the Open Market through domestic sale/ export and through additional allocations under (TPDS). 

Allocation of Food Grains 

Targeted Public Distribution System 

To ensure availability of minimum quantity of food grains at a subsidized rate to the families living below the poverty line, the Government launched the Targeted Public Distribution System (TPDS) in June, 1997. It was intended to benefit about 6 crore poor families in the country for whom a quantity of 72 lakh tonnes of food grains was earmarked annually at the rate of 10 kg per family per month. 

The allocation was increased from 10 kg to 20 kg from April 1, 2000. This was increased from 20 to 25 kg per family per month from July, 2001. From April 1, 2002, this allocation has been further increased from 25 to 35 kg per family per month. While the allocation for Below Poverty Line (BPL) and Antyodaya Anna Yojana (AAY) families are being made @ 35 kg per month per family, allocation for Above Poverty Line (APL) families are being made depending on availability of food grains in the central pool. Presently, the APL allocations to states/Union Territories are in the range of 15 kg to 35 kg per family/month. The Central Issue Price (CIP) for BPL families is ₹ 4.15 per kg for wheat and ₹ 5.65 per kg for rice. 

Antyodaya Anna Yojana 

In order to make TPDS more focused and targeted towards the poorest section of population, the ‘Antyodaya Anna Yojana’ (AAY) was launched in December, 2000 for one crore poor families. AAY contemplates identification of poorest of the poor families from amongst the BPL families covered under TPDS and providing them foodgrains at a highly subsidized rate of ₹ 2/- per kg for wheat and ₹ 3/- per kg for rice. Under the scheme, states/union territories bear the distribution cost, including margin to dealers and retailers as well as the transportation cost, which provides the poorest access to food grains at highly subsidized rates. 

The scale of issue that was initially 25 kg per family per month has been increased to 35 kg per family per month with effect from April 1, 2002. 

The AAY Scheme has been expanded in subsequent years so as to cover 2.50 crore households (thus reducing the name of families in BPL by equal number). 

Computerization of PDS 

To improve the delivery system of PDS, Government of India has approved Plan Scheme ‘End-to- End Computerization of TPDS Operations across the country’ in the (2012-17) on cost sharing basis with states/union territories. Component-I of the scheme, currently under implementation, comprises activities, viz. digitization of ration cards/beneficiary and other databases, computerization of supply-chain management, setting up of transparency portal and grievance redressal mechanism. The total funding requirement of ₹ 884.07 crore has been approved, out of which shares of Government of India and state governments/union territory administrations are estimated at ₹ 489.37 crore and ₹ 394.70 crore, respectively. 

National Food Security Act, 2013 

As a major policy intervention to further improve our food security measures, the Government notified the National Food Security Act, 2013 on September 10, 2013. The Act provides for food and nutritional security in human life cycle approach, by ensuring access to adequate quantity of quality food at affordable prices to people to live a life with dignity. The Act makes a paradigm shift in approach to food security – from welfare to a rights based one. 

The Act provides for coverage of upto 75 per cent of the rural population and upto 50 per cent of the urban population for receiving subsidized food grains under Targeted Public Distribution System (TPDS), thus covering about two-thirds of the population. The eligible persons will be entitled to receive 5 kg of foodgrains per person per month at subsidized prices of ₹ 3, 2 and 1 per kg for rice, wheat and coarse grains respectively. The existing AAY households, which constitute the poorest of the poor, will continue to receive 35 kg of food grains per household per month. 

The Act also has a special focus on nutritional support to women and children. Pregnant women and lactating mothers will be entitled to meals as per nutritional norms as well as to receive maternity benefit of not less than ₹ 6,000. Children upto 14 years of age will be entitled to nutritious meals or take home rations as per the prescribed nutritional standards. In case of non- supply of entitled food grains or meals, the beneficiaries will receive food security allowance. 

The Act also contains provisions for setting up of grievance redressal mechanism at the district and state levels. Separate provisions have also been made for ensuring transparency and accountability. Implementation of Act has so far started in 11 states/union territories. 

Other Welfare Schemes 

Mid-Day Meal Scheme 

The Mid-Day Meal Scheme launched on August 15, 1995 by the Ministry of Human Resource Development with a view to enhance enrolment, retention, attendance and simultaneously improve nutritional levels among students in primary schools initially in 2,408 blocks in country, was extended to all the blocks in 1997-98. The scheme presently covers students of Class I-VIII of Government and Government aided schools, Education Guarantee Scheme/ Alternative and Innovative Education Centres (EGS/AIE). 

The Department of Food and Public Distribution allocates annual requirement of food grains under the Scheme to Department of School Education and Literacy, Ministry of Human Resource Development, which further allocates food grains to states/union territories and FCI releases food grains to states/union territories at BPL rates as per allocation. 

(Implementing Agency:- Ministry of Human Resource Development)

Wheat Based Nutrition Programme 

Under Wheat Based Nutrition programme (WBNP) implemented by the Ministry of Women and Child Development, food grains are allotted to states/union territories under the Integrated Child Development Scheme (ICDS) for providing nutritious/ energy food to children below six years of age and expectant/lactating women. 

Rajiv Gandhi Scheme for Empowerment of Adolescent Girls - ‘SABLA’ 

The SABLA Scheme was launched on November 19, 2010 by the Ministry of Woman and Child Development by merging two schemes namely Nutrition Programme for Adolescent Girls (NPAG) and Kishori Shakti Yojana (KSY) into a single scheme to be implemented in 200 selected districts across the country. The scheme aims at empowering adolescent girls of 11-18 years by improving their nutritional and health status and upgrading various skills like home skills, life skills and vocational skills. It also aims at equipping the girls on family welfare, health hygiene, etc., and information and guidance on existing public services along with aiming to mainstream out of school girls into formal or non-formal education. The requirement of food grains under the scheme for nutrition is @ 100 gm. of grains per beneficiary per day for 300 days in a year. Department of Food and Public Distribution allocates food grains for the scheme as per the projections of Ministry of Woman and Child Development. 

( Implementing agency is Ministry of women and child development)

Scheme for Supply of Food Grains to Welfare Institutions 

With a view to meeting the requirement of welfare Institutions viz. charitable institutions such as Beggar Homes, Nari Niketans and other similar welfare institutions not covered under TPDS or under any other welfare scheme, an additional allocation of food grains (rice and wheat) not exceeding 5 per cent of the BPL allocation, is made to states/union territories at BPL prices by the Department of Food and Public Distribution. 

Scheme for Supply of Foodgrains for SC/ST/OBC Hostels 

This scheme was introduced in October, 1994. The residents of the hostels having 2/3rd students belonging to SC/ST/OBC are eligible to get 15 kg food grains per resident per month. Allocations of food grains under the scheme are made by the Department of Food and Public Distribution based on the requests received from the States/Union Territories Governments. During the current year, allocation under the scheme have been made so far to Andhra Pradesh, Chhattisgarh, Dadra and Nagar Haveli, Karnataka, Madhya Pradesh, Nagaland, Telangana and Tripura. 

Annapurna Scheme 

The Ministry of Rural Development launched this scheme in 2000-01. Department of Food and Public Distribution allocates food grains as per the requirement projected by the Ministry of Rural Development. Indigent senior citizens of 65 years of age or above who are not getting pension under the National Old Age Pension Scheme (NOAPS) are provided 10 kg. of food grains per person per month free of cost under the scheme. 

(here Dept of food and ciivl supplies allocates the grains only but implementing agency is the ministry of rural development)

Open Market Sale Scheme 

Due to an open ended procurement policy of food grains providing price support to every farmer, who wants to sell his produce to the Government at MSP, usually Government agencies end up in procuring more food grains. This has led to accumulation of excess stock under central pool as against the required buffer norms. As excess stock involve carrying cost which adds to the burden of food subsidy on the Government, it is necessary that they are liquidated from time to time either through sale in the open domestic market or through exports. Liquidation of excess stocks under Open Market Sale Scheme-Domestic (OMSS-D) also helps in keeping food inflation under check and controlling prices of food grains during off season, especially in the deficit areas. Usually, a decision regarding the quantity of wheat and rice to be sold under OMSS-D and the rate of sale is taken by the Government on an annual basis and FCI undertakes sale operations accordingly. As compared to wheat, the sale of rice under OMSS-D has remained nominal as rice is produced in the country round the year and thus has better availability in the markets. 

Sale of wheat under OMSS-D is mostly undertaken through open tenders from various depots of FCI, spread across the country, at a suitable reserve price, which is kept marginally higher than MSP to cover some incidental costs of the procurement, so that demand of roller flour millers and other bulk purchasers can be met without causing inflationary pressure on the wheat market. In previous years, Government uses to reserve some quantity of wheat for sale to small traders at reserve price and some quantity was issued to the State Governments or national level cooperative institutions on demand for retail sale. However, in 2014-15, Government has approved a quantity of 100 lakh tonnes of wheat for open sale through tenders under OMSS-D without making any separate allocation for small traders or Government/cooperative institutions and such agencies have also been allowed to participate in the open tenders for purchase of wheat. During 2012-13 and 2013-14 also Government had allocated 100 lakh tonnes of wheat for sale under OMMS-D and about 69 lakh tonnes of wheat was sold in 2012-13 and 61 lakh tonnes in 2013-14. 

For the past two financial years, the Government has tried to rationalize the OMSS-D pricing policy for wheat by keeping it higher than Minimum Sale Price (MSP) so that the private parties are encouraged to purchase wheat directly from the mandis at MSP during the harvest season. While keeping it below the acquisition cost to FCI helps in maintaining lower wheat prices in the market during the period of short supply. This kind of pricing policy under OMSS-D not only makes the mandis attractive for the private buyers but turn them competitive as well. 

If the OMSS-D reserve price for wheat is kept at par or only a little above MSP, then the private buyers would not prefer to buy wheat from the market and add carrying cost also, as then they would prefer to buy it later from FCI at cheaper rate under the scheme. Normally freight charges are added in the Reserved Price by FCI for transporting wheat to various non-processing states under the scheme but now flexibility has been provided allowing buyers of the non-procuring states to purchase wheat under the scheme directly in Punjab, Haryana and Madhya Pradesh and make their own arrangement for transportation. To help them, a dedicated movement facility has also been provided to such buyers with the help of Indian Railways. 

In order to improve liquidation of excess stock of wheat in central pool and to keep inflation under effective check, Government has not increased the reserve price for open tender sale by FCI this year and like 2013-14, the reserve price for 2014-15 has been fixed at ₹ 1,500 per quintal for sale of last year’s stock from Punjab, Haryana and Madhya Pradesh. However, to further improve the liquidation under the principle of ‘first in first out’ (FIFO) the fresh stock of current season has also been offered for sale at a premium with reserve price of ₹ 1,570 per quintal. In the case of sale from FCI depots in other states, the railway freight from Ludhiana in Punjab to the concerned feeder railhead and local transportation charges of FCI is also added in the sale price. 

FCI last year started e-auction of wheat along with the physical tenders but in 2014-15 it has switched over entirely to e-auction mode helping the buyers with its ease of operations, transparent tendering and clean bidding process. 

Storage of Food Grains 

FCI has its own grid of covered godowns in all states to safely stock the central pool food grains. In addition, it hires capacity from Central Warehousing Corporation (CWC) and state agencies like State Warehousing Corporations as well as private parties. Normally peak levels of central pool stock occur around June 30, every year. To meet the short-term peak requirements of storage capacity, FCI also resorts to Cover and Plinth (CAP) storage. CAP is also a scientific method for short-term storage and protects the food grains from loss due to rains and pests/rodents/birds.

Augmentation of Storage Capacity 

Higher MSP coupled with better outreach has led to higher procurement in the past few years. Hence, a necessity was felt to augment the storage capacity for food grains. The department is implementing two schemes, namely Private Entrepreneurs Guarantee (PEG) Scheme and Plan scheme, for augmenting the covered storage capacity and to further reduce dependence on CAP storage. 

Under the PEG Scheme, which was launched in 2008, godowns are constructed in PPP mode and the land and construction cost is borne by the selected partners. FCI on its part guarantees 10 years usage of storage capacities to the private investors and nine years to CWC and SWCs. Locations for construction of godowns is identified by the FCI on the basis of recommendations of State Level Committees (SLCs) to cover the gaps in storage. For consuming areas, the storage gap is assessed on the basis of four months requirement of PDS and OWS while for procuring states the storage gap has been assessed based on the highest stock levels in the last three years, and keeping in view the potential of procurement. 

Under the scheme, approximately 200 lakh tonnes capacity creation has been planned at various locations in 19 states, and till June 30, 2014, capacity of 153.16 lakh tonnes has been sanctioned for construction and 120.30 lakh tonnes has been completed. 

The Government has also approved construction of modern storage facilities in the form of silos of 20 lakh tonnes capacity within the overall approved capacity for PEG Scheme. Each silo will have capacity of 25,000 or 50,000 tonnes. FCI has identified the locations of silos in 10 states. Construction is being planned in the PPP in both Viability Gap Funding (VGF) and non-VGF modes. 

The department is implementing a Plan Scheme for construction of godowns with focus on augmenting capacity in the North-Eastern Region. While finalizing the scheme for 12th Five Year Plan, it was decided to expand the scope of the scheme to states like Himachal Pradesh, Jharkhand, Bihar, Odisha, West Bengal, Chhattisgarh, Maharashtra and Lakshadweep for the purpose of construction of godowns. 

In addition, the State Governments have been asked to create intermediate storage capacities at Block/Taluka level to store foodgrains collected from FCI depots, for further distribution to fair price shops. This is necessary to improve the supply chain logistics for TPDS. While construction of intermediate godowns is the responsibility of the State Governments, DFPD has been providing funds under Plan Scheme to Governments of the north-eastern states and Jammu and Kashmir for this purpose, considering their difficult geographical conditions. 

Under the Plan Scheme, funds are released to the FCI in the form of equity for land acquisition and for construction of storage godowns, and related infrastructure like railway sidings, electrification, installation of weighbridge, etc. For construction of intermediate storage godowns by the state governments of North-East Region and Jammu and Kashmir, funds are released in the form of grants-in-aid. 

Warehousing Development and Regulatory Authority 

For the growth and development of warehousing sector, to bring reforms in the agricultural marketing and to increase credit flow in the farm sector, the Government of India has introduced a negotiable warehouse receipt system in the country by enacting the Warehousing (Development and Regulation) Act, 2007 which has come into force from October 25, 2010. The Central Government has constituted the Warehousing Development and Regulatory Authority (WDRA) on October 26, 2010 for implementation of the provisions of the Act. 

The Negotiable Warehouse Receipts (NWRs) issued against stocks of farm produces deposited by the farmers in warehouses would help them in seeking loan from banks. It would help in overcoming the situation of distress sale of agricultural commodities by the farmers during peak harvest season. It will also be beneficial for other stakeholders such as banks, financial institutions, insurance companies, trade, commodity exchanges as well as consumers. 

Warehouses need to be registered with the WDRA for issuing NWRs. The warehouses are accredited by the approved accreditation agencies prior to their registration with the WDRA to ensure that basic requirements of scientific and safe storage of agricultural and other commodities are fully met by these warehouses. The authority has approved 17 accreditation agencies for accreditation of warehouses. 

The WDRA has notified 123 agricultural commodities including cereals, pulses, oilseeds, vegetable oils, spices, edible nuts and miscellaneous items like rubber, tobacco, tea coffee and makhana for issuing NWRs. Besides, 26 horticulture commodities such as potato, dehydrated onion, garlic, ginger, turmeric, apple and resin, etc., have also been notified for issue of NWRs. Basic requirements for accreditation of cold storages have been finalized by a committee under the chairmanship of MD, National Horticulture Board. 

The authority has taken initiative to integrate the Primary Agricultural Cooperative Societies (PACSs) warehouses under the negotiable warehouse receipt system so that small and marginal farmers may get benefited from this scheme. It has so far registered 475 warehouses of CWC, SWCs, Private Sector and PACS with a total storage capacity of 17.79 lakh tonnes. These warehouses have issued 23,745 negotiable warehouse receipts against the agricultural commodities valued at ₹ 2,541.98 crore. The banks have financed ₹ 826.09 crore against NWRs. 

WDRA in consultation with Department of Economic Affairs and the National Institute of Public Finance and Policy has initiated an exercise for transformation of WDRA to invigorate the warehousing sector and significantly improve post harvest lending to farmers against NWRs. 

Post Harvest Management of Food Grains 

Quality Standard for Food Grains 

The Government exercises due control over the quality of food grains procured for the central pool. The Quality Control Cell of the ministry at New Delhi and the field offices at Bengaluru, Bhopal, Bhubaneshwar, Kolkata, Hyderabad, Lucknow and Pune monitor the quality of food grains procured, stored and issue for distribution by FCI and State Governments and their agencies. During 2013-14, 767 Food Storage Depots, 457 Procurement Centres, 329 Rail Heads, 907 Fairs Price Shops and 207 Rice Mills were inspected by the Quality Control Cells. 

Indian Grain Storage Management and Research Institute 

Indian Grain Storage Management and Research Institute (IGMRI), Hapur and it field stations at Ludhiana (Punjab) and Hyderabad (Andhra Pradesh) are engaged in the training and Research and Development (R and D) work relating to scientific grain storage management. The IGMRIs also conduct training courses on storage, inspection of foodgrains, pest control, etc., for the officers of central, state and private storage agencies, pest control operators, etc. 

Central Grain Analysis Laboratory 

The Central Grain Analysis Laboratory (CGAL) located in New Delhi assists in monitoring the quality of food grains at the time of procurement, storage and distribution by analysing samples collected by Quality Control Officers. The CGAL has been upgraded by renovating the laboratory infrastructure and acquiring modern scientific equipments for testing/analysis in 2012. A total number of 1,024 samples of various food grains were analysed during 2013-14. 

Export and Import Policy of Food Grains Export policy of rice, wheat and wheat products 

Government has allowed free export of wheat and non-basmati rice by private parties out of privately held stocks w.e.f September 9, 2011 through EDI enabled ports. 

It has also approved export of non-basmati rice and wheat under free export category through State Trading Enterprises (STEs) including NCCF and NAFED. Exports have also been allowed through the Land Custom Stations (LCS) on Indo-Bangladesh and Indo-Nepal border. 

The Government on July 3, 2009 had initially allowed export of 6.5 lakh tonnes of flour (Maida), semolina (Rava/Sooji), whole meal atta and resultant atta up to March 31, 2010 on private account. The time limit for export of the above wheat products had been extended from time to time and for the last time it was extended upto March 31, 2013. Subsequently, Government has allowed the export of processed and /or value added agriculture products even in the event of restriction/ban on the export of basic farms produce without any quantitative restrictions. 

Status of export of wheat and rice on private account 

A quantity of 67.7 lakh tonnes of non-basmati rice has been exported under ‘free export’ category during 2013-14 and a quantity of 22.5 lakh tonnes has been exported upto September 5, 2014. Similarly, a quantity of 16.87 lakh tonnes of wheat has been exported under ‘free export’ category during 2013-14 and 15.13 lakh tonnes has been exported upto September 5, 2014. 

Status of export on Government account 

Government on July 3, 2012 approved export of 20 lakh tonnes of wheat from Central Pool stock of FCI through Central Public Sector Undertakings (CPSUs) viz. STC, MMTC and PEC. Government has also approved export of additional quantity of 250 lakh tonnes of wheat from Central Pool Stock of FCI through Central Public Sector Undertakings (CPSUs). Out of these 45 lakh tonnes, a quantity of 42.4 lakh tonnes was exported at a weighted average price of US$ 311 per tonne. 

Sale of additional 50 lakh tonnes of wheat has been approved by Government till June 30, 2013 from FCI godowns in Punjab and Haryana from the wheat stocks pertaining to Rabi Marketing season (RMS) 2011-12 for export purpose through private traders. 

Government approved export of a further quantity of 20 lakh tonnes of wheat from central pool stock of FCI through the CPSUs during the Financial Year 2013-14, which was later on extended upto June 30, 2014. A total of 15.57 lakh tonnes of wheat was exported at a weighted average price of US $ 283 per tonne till June 30, 2014. 

Export of wheat and rice to various friendly countries on diplomatic basis/humanitarian aid has also been permitted by the Government on the recommendations of the Ministry of External Affairs. 

Import of rice and wheat 

Import of wheat and rice is allowed under free import category. There is no import duty on wheat at present whereas the import of rice is allowed at 70 per cent ad-valorem. 

Sugar 

Sugar production 

India is the largest consumer and second largest producer of sugar in the world. The production of sugar during 2013-14 is estimated to be about 243 lakh tonnes which is more than the estimated consumption of 240 lakh tonnes.

Sugarcane Pricing Policy 

With the amendment of the Sugarcane (Control) Order, 1966 on October 22, 2009, the concept of Statutory Minimum Price (SMP) of sugarcane was replaced with the ‘Fair and Remunerative Price (FRP)’ of sugarcane for 2009-10 and subsequent sugar seasons. The cane price announced by the Central Government is decided on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP) after consulting the State Governments and associations of sugar industry. The amended provisions of the Sugarcane (Control) Order, 1966 provides for fixation of FRP of sugarcane having regard to the these factors:

 (a) cost of production of sugarcane;

 (b) return to the growers from alternative crops and the general trend of prices of agricultural commodities; 

(c) availability of sugar to consumers at a fair price;

 (d) price at which sugar produced from sugarcane is sold by sugar producers;

 (e) recovery of sugar from sugarcane;

 (f) the realization made from sale of by-products viz. molasses, bagasse and press mud or their imputed value; 

(g) reasonable margins for the growers of sugarcane on account of risk and profits. 

Under the FRP system, the farmers are not required to wait for the end of the season or for any announcement of the profits by the sugar mills or the Government. The new system also assures the margins on account of profit and risk to farmers, irrespective of the fact whether the sugar mills generate profit or not and is not dependent on the performance of any individual sugar mill. 

In order to ensure that higher sugar recoveries are adequately rewarded and considering variations amongst sugar mills, the FRP is linked to a basic recovery rate of sugar, with a premium payable to farmers for higher recoveries of sugar from sugarcane. 

The new system for distribution of Sugar in the Public Distribution System 

Sugar being an essential commodity of mass consumption is supplied under the Public Distribution System (PDS) mainly to BPL families except in the north-eastern states, hilly states and island territories where universal coverage is allowed, with subsidy support from the Central Government. Prior to de-regulation of sugar sector, the Central Government was following a policy of partial control on sugar under which a part of sugar production was requisitioned from sugar mills as levy sugar for distribution at a uniform Retail Issue Price (RIP) in PDS. 

The Central Government, in April, 2013, has decontrolled the sugar sector by removing the levy obligation on sugar mills and doing away with the regulated release mechanism on open market sale of sugar. Under the new dispensation, to make sugar available in the PDS at the existing Retail Issue Price (RIP) of ₹ 13.50 per kg, the State Governments/union territories administrations have been asked to procure it from the open market through a transparent system. The Central Government is reimbursing the states/union territories @ ₹18.50 per kg, limited to the quantity based on their existing allocations (about 27 lakh tonnes). 

As of now, 25 states/union territories have participated in the scheme and no disruption in the distribution of the sugar through PDS has been reported. 

Ethanol Blending Programme 

Ethanol is an agro-based product, basically produced from the by-product of the sugar industry, viz. molasses. In the years of surplus production of sugarcane, when the sugar prices are depressed, the sugar industry is unable to pay cane price to the farmers. This is mainly due to surplus production of sugar. The ethanol blended petrol programme, besides lowering pollution levels, is expected to provide another outlet for ethanol use, thus insuring utilization of molasses produced as a by-product during manufacture of sugar. 

It has been decided by the Government that 5 per cent mandatory ethanol blending with petrol should be implemented across the country and procurement price of ethanol will be decided between Oil Marketing Companies and suppliers of ethanol. This is expected to generate revenue for sugar mills enabling them to avoid building up of cane price arrears. 

Scheme For Extending Financial Assistance to Sugar Undertakings 

The Government on January 3, 2014 has notified a Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU-2014) envisaging interest free loans worth ₹ 6,600 crore by bank as additional working capital to sugar mills, for clearance of cane price arrears of previous sugar seasons and timely settlement of cane price of current sugar season to sugarcane farmers. Interest burden on this loan, estimated at ₹ 2,750 crore over next five years would be borne by the Government through Sugar Development Fund. 

Incentive Scheme for Marketing and Promotion of Raw Sugar Production 

The Government on Febuary 28, 2014 notified a scheme allowing incentives for marketing and promotion services for raw sugar production targeted for export market. The incentive available under the scheme shall be utilized by the sugar mills for making payment to the farmers. 

Sugar Development Fund 

The Sugar Development Fund (SDF) was formed in 1982, under an Act of Parliament to provide, inter alia, for the financing of activities for development of sugar industry. The fund is financed from the proceeds of cess levied and collected under the Sugar Cess Act, 1982, reduced by cost of collection as determined by Government, together with any money received by the Government for the purpose of the Sugar Development Fund Act, 1982. The fund is utilized for concessional loans to sugar industry, grants-in-aid for promoting research as well as contingency schemes – export subsidy/buffer subsidy/interest subvention, etc. 

Under the Sugar Development fund Act 1982, the Fund can be utilized by the Government of India for;

 (a) making loans for facilitating the rehabilitation and modernization of any sugar factory; 

(b) making loans for the undertaking of any scheme for development of sugarcane in the area in which any sugar factory is situated; 

(c) making grants for the purpose of carrying out any research project aimed at the promotion and development of any aspect of sugar industry; 

(d) defraying expenditure on internal transport and freight charges on export shipment of sugar

 (e) making loans to any sugar factory to implement a project of bagasse-based co-generation of power; 

(f) making loans to a sugar factory for production of anhydrous alcohol or ethanol; 

(g) defraying expenditure for the purpose of building up and maintenance of buffer stock with a view to stabilizing price of sugar; 

(h) defraying expenditure for the purpose of financial assistance to sugar factories towards interest on loans given in terms of any scheme approved by the Central Government from time to time; 

(i) defraying expenditure on marketing and promotion service for raw sugar production; 

(j) defraying any other expenditure for the purpose of the Act. 

Since inception, an amount of ₹ 2,776.57 crore for modernization-cum-expansion projects and ₹ 991.51 crore for cane development project has been disbursed from SDF to sugar factories. Since 2003, an amount of ₹ 2,399.68 crores for bagasse base cogeneration projects and ₹ 550.42 crore for ethanol projects has been disbursed from SDF to sugar factories. It is estimated that it has helped create over 3,145 KLPD capacity for ethanol production over 3,943 MW of cogeneration capacity in the sugar factories. 

Edible Oils 

The efficient management of edible oils in the country involves steps to ensure the sufficient availability of edible oils to the consumer at reasonable rates. As per fourth Advance Estimates of Ministry of Agriculture, released on August 14, 2014 for 2013-14 (November-October), estimated oilseeds production is about 328.79 lakh tonnes as compared to 309.43 lakh tonnes during the previous year. Production of oils from these oilseeds in 2013-14 is likely to be about 77.80 lakh tonnes. The net availability of edible oils, including from all primary and secondary sources has increased from 79.46 lakh tonnes in 2009-10 to 107.90 lakh tonnes in 2013-14. Inspite of this, the country imports edible oils to meet the gap between demand and availability, which is about 50 per cent of the total requirement. 

Status of Vegetable Oils Industry 

There are about 124 Vanaspati units and 474 Solvent Extraction Plants in the country with an annual capacity of 40.06 lakh tonnes and 290 lakh tonnes respectively. Due to various reasons, mainly the seasonal availability of raw material, the total capacity utilization of edible oil industry is around 35 per cent. 

Ban on Export of Edible oils 

Exports of edible oils has been banned from March 2008 with certain exemptions i.e. 

1. castor oil
2. coconut oil, from all Electronic Data Interchange (EDI) ports and through notified Land Customs Stations (LCS) and
3. certain oil produced from minor forest produce. Further, export of edible oil has been permitted in branded consumer packs of up to 5 kg subject to Minimum Export Price of USD 1,100 per tonnes which has been reduced from earlier USD 1400 per tonne, on April 30, 2014. 

Import duty on Edible Oils 

As there is more demand in excess over the domestic supply of edible oils, its import has been resorted to meet the gap in supply. In order to maintain uninterrupted supply of edible oils at affordable prices to the consumers and at the same time keeping in mind the interest of the industry, import duty on refined edible oils was raised from 7.5 per cent to 10 per cent in January, 2014 while maintaining the duty on crude edible oils at 2.5 per cent. 

International Cooperation 

India is associated with a number of international agencies working in the field of food related matters. These include World Food Programme (WFP), SAARC Food Bank, Food and Agriculture Organization (FAO), International Grains Council (IGC) etc. Brief detail of some of the important international cooperation activities of the Department of Food and Public Distribution are as follows: 

World Food Programme 

Government of India allocates food grains (wheat/rice) at BPL price under a Country Programme Action Plan (CPAP) 2008-12 signed between the Government of India and the United Nations World Food Programme (WFP) for the development schemes to be utilized in various WFP assisted projects in India. A total quantity of 1,65,065 tonnes of food grains have been allocated during 2008 to 2011. 

The WFP’s projects involving food improvement in PDS food delivery systems and nutritional aspects of food based schemes are currently under implementation in states of Odisha, Chattisgarh, Madhya Pradesh, Jharkhand and Rajasthan. Capacity development programmes for food security are being implemented by WFP in these states and also in Gujarat, Uttarakhand, Uttar Pradesh, Bihar and Tamil Nadu. 

SAARC Food Bank 

The SAARC Food Bank has been set up to supplement national efforts to provide food security to the people of the SAARC region during emergencies and food shortages. SAARC Food Bank has a reserve of food grains maintained by each member country consisting of either wheat or rice, or a combination of both as assessed share of the country. Presently India’s assessed share of food grains is 3,06,400 lakh tonnes out of a total quantity of 4,86,000 lakh tonnes allocated for SAARC Food Bank. 

In 2013 the proposal of India to designate the existing food grain testing laboratory facility of the Department, the Central Grain Analysis Laboratory (CGAL) New Delhi, as the regional reference laboratory for SAARC Food Bank for testing food grains has been agreed. Besides, Bank Board also agreed to the proposal of India for providing training to the officials of SAARC member countries in foodgrain storage management at the Indian Grain Storage Management and Research Institute (IGMRI), Hapur. 

Food and Agricultural Organisation 

FAO is one of the largest specialized agencies in the UN System founded in 1945 with a mandate to raise levels of nutrition and standard of living by improving agricultural productivity and living conditions of rural population. The Committee on World Food Security (CFS) serves as a forum in the United Nations System for review and follow-up of policies concerning world food security, including food production, physical and economic access to food. India is a member to both FAO and CFS. The CFS monitors the progress of implementation of the WFS Plan of Action. 

International Grains Council 

India is a member of the IGC which was previously known as International Wheat Council. IGC is an intergovernmental forum of exporting and importing countries, for co-operation in wheat and coarse grain matters. It administers the Grains Trade Convention 1995. 

The IGC Secretariat, based in London, also services the Food Aid Committee, established under the Food Aid Convention. International Grains Agreement comprises of Grains Trade Convention (GTC) and Food Aid Convention (FAC). India is a signatory to the International Grains Agreement (IGA), 1995 and its Grain Trade Convention (GTC), 1995 which is effective from July 1, 1995. India has been included in the category of exporting members in July, 2003 and represented in the meetings/session of the council held from time to time. 

Consumer Affairs 

The mandate of the Department of Consumer Affairs is consumer advocacy. India was a pioneer in consumer advocacy with the Consumer Protection Act (CPA), a pathbreaking legislation at the time, enacted in 1986 and the establishment of a separate Government department dedicated to consumer affairs as early as in 1997. Translating this mandate into action entails:

 (a) enabling consumers to make informed choices;

 (b) ensuring fair, equitable and consistent outcomes for consumers; and 

(c) facilitating timely and effective consumer grievance redress. 

Consumer Awareness 

The department has been conducting a countrywide multimedia awareness campaign since 2005 on various issues related to consumer rights and responsibilities across diverse subjects. ‘Jago Grahak Jago’ has today become a household axiom. More recently, joint publicity campaigns have been launched in partnership with the related Government departments/organizations that deal with a mass consumer clientele.

 For instance, on food, with the Food Safety and Standards Authority of India (FSSAI); 

on financial services with the Reserve Bank of India (RBI); and

 on medicines with the National Pharmaceutical Pricing Authority (NPPA) through various electronic and print media such as television, radio, newspapers and outdoor advertising.

 The consumer awareness campaign is implemented through the Directorate of Audio and Visual Publicity (DAVP), the Doordarshan Network (DD) and the All India Radio (AIR). 

Consumer Welfare Fund 

The Central Excise and Salt Act, 1944 was amended in 1991 to enable the Central Government to create a Consumer Welfare Fund into which unclaimed central excise revenues not refundable to the manufacturers would be credited annually. The Consumer Welfare Fund was created in 1992 with the objective of providing financial assistance to promote and protect the welfare of the consumer, create consumer awareness and strengthen the voluntary consumer movement in the country, particularly in rural areas. 

The Department of Consumer Affairs operates the fund, set up by the Department of Revenue under the Central Excise and Salt Act, 1944. The Consumer Welfare Fund Rules were notified in the Gazette of India in 1992 and Guidelines were framed in 1993. Under the Consumer Welfare Fund Rules, since revised in 2014, any agency/organization engaged in consumer welfare activities for at least a period of five years and registered under the Companies Act, Societies Registration Act, Cooperative Societies Act or any other law for the time being in force, are eligible for financial assistance from the fund. A sum of ₹16.17 crore was available in the Consumer Welfare Fund as on March 3, 2014. Of this balance, a budget provision of ₹ 15.00 crore was provided during the Financial Year 2014-15. An amount of ₹ 13.11 crore was utilized from the fund in 2014-15. 

Consumer Protection 

The objectives of the consumer protection programme are:

 (i) to create suitable administrative and legal mechanisms which would be within the easy reach of consumers; 

(ii) to engage with both Government and non-Governmental organizations to promote and protect the welfare of the consumers; 

(iii) to involve and motivate various stakeholders including consumer organizations, industry, regulators and citizens especially the women and youth to participate in the programmes; 

(iv) to generate awareness among consumers about their rights and responsibilities, motivate them to assert their rights so as not to compromise on the quality and safety of goods and services; and to seek redress of their disputes in the appropriate consumer forum, when required. 

The Consumer Protection Act, 1986 

A key milestone in consumer advocacy in the country was the enactment of Consumer Protection Act, 1986. This Act provided the legislative framework to protect the interests of the consumer better by creating a formal but quasi-judicial dispute resolution mechanism exclusively for consumers. This progressive legislation established the three tier quasi-judicial consumer dispute redress machinery at the national, state and district levels aimed at providing simple, speedy and affordable redress to consumers. 

As present 644 district fora, 35 state commissions and the national commission at the apex level are functioning in the country. The results, however, have been sub-optimal resulting in delays and the accumulation of cases. Irrespective of the causes, the credibility of the consumer courts have come into question. 

National Consumer Helpline 

 Consumers from all over the country can access the toll-free number 1800-11-4000 and seek telephonic counseling for problems that they face as consumers relating to various sectors.

Consumer Grievance Redress 

The Consumer Protection Act, 1986 provides a three-tier quasi-judicial consumer dispute resolution mechanism in the country to adjudicate complaints filed before them and to provide speedy redress to consumers. 

This includes: 

(i) the National Consumer Disputes Redress Commission (National Commission) at the apex level with territorial jurisdiction over the whole country and pecuniary jurisdiction to consider consumer disputes/complaints involving claims above ₹1.00 crore and with appellate jurisdiction over state commissions; 

(ii) 36 state consumer disputes redress commissions (state commissions) with territorial jurisdiction over the state/union territory concerned and financial jurisdiction to entertain consumer complaints involving claims above ₹ 20.00 lakh and up to ₹ 1.00 crore and with appellate jurisdiction over the district fora; and

(iii) 644 district consumer dispute redress fora (District Forum) with territorial jurisdiction over the district and pecuniary jurisdiction up to ₹ 20.00 lakh. 

Bureau of Indian Standards 

The Bureau of Indian Standards was set up as a statutory organization under the Bureau of Indian Standards Act, 1986 taking over the assets and liabilities of the Indian Standards Institution (ISI) that came into existence in 1947. The Bureau has its headquarters in New Delhi. It has a network of five regional offices, 32 branch offices and eight laboratories which act as effective link between BIS, government, industry and consumers. The bureau has made steady progress in the various fields of its key activities namely standards formulation, product certification, management system certification and hallmarking. 

National Test House 

The National Test House (NTH) is a premier test and quality evaluation laboratory for industrial, engineering and consumer products under the administrative control of the Government of India since the year 1912. This century old scientific and technological organization was established originally by the Indian Railway Board as a captive test and quality evaluation laboratory (originally known as Government Test House) at Alipore, Kolkata with a view to examining the quality of the various products meant to be used by the Indian Railways. The first regional laboratory was set-up by NTH in Mumbai in the year 1963 and subsequently at Chennai (1975), Ghaziabad (1977), Jaipur (1994) and Guwahati (1996). The National Test House works in the field of testing, evaluation and quality control of various engineering materials and finished products, calibration of measuring equipment/ instruments and devices. To be precise, the NTH issues test certificates in scientific and engineering fields to certify conformity to national/international specifications or customer standard specifications. 

Price Monitoring 

The Department of Consumer Affairs (DCA) operates a Price Monitoring Cell (PMC) tasked with monitoring prices of select essential commodities. The monitoring is done in respect of both retail and wholesale prices on a daily basis. The cell monitors the prices of 23 essential commodities, which include cereals, pulses, vegetables, edible oils, sugar, milk, etc., collected from 71 reporting centres across the country through the Civil Supplies Department of states/union territories. The prevailing price situation as well as the other factors that impact prices, both in the domestic and the international markets are analysed and brought to the notice of the interministerial consultation mechanism for appropriate policy action. Based on the analysis of price data received, specific interventions are undertaken including allowing import of various items of mass consumption at zero or concessional import duties; restriction on exports, when necessary; prescribing stock holding limits under Essential Commodities Act; and allocation of food grains at affordable prices under the Targeted Public Distribution System (TPDS). 

An important initiative underway is the scheme for strengthening the price monitoring mechanism at the Centre and in the states as well as strengthening the services of the National Informatics at the Centre (NIC). The Price Monitoring Cell (PMC) monitors the prices of 22 essential commodities, viz., rice, wheat, atta, gram dal, arhar dal, moong dal, urad dal, masoor dal, tea, sugar, salt, Vanaspati, groundnut oil, mustard oil, milk, soya oil, palm oil, sunflower oil, gur, potato, onion and tomato. The retail prices and wholesale prices on a daily basis are collated from 71 centres based on the information furnished by the State Food and Civil Supplies Departments. 

These daily commodity prices are available on the website of the department (http://fcamin.nic.in) and are updated regularly. Analysis on price movement in relation to production, procurement and export/import of select essential commodities, international prices 

and other relevant factors are made for arriving at policy interventions. The DCA is working on increasing the number of reporting centres from 71 at present to 100 by the end of 2017 in a phased manner, enhancing coordination with states/union territories to make price monitoring more effective, expanding the list of essential commodities currently monitoring keeping in view the changing consumption pattern through periodical market surveys, commodity specific research on consumption pattern through periodical market surveys, commodity specific research studies/surveys such as demand-supply and consumption pattern analysis of essential food items to facilitate appropriate policy intervention. Price Monitoring Cell (PMC) initiated commodity specific studies/surveys such as for pulses and a study on structural factors behind food inflation. 

Rice and Wheat 

During the current year (April, 2014 to March, 2015), the retail prices of rice have shown a mixed trend at most of the reporting centres. The all India monthly average retail prices of rice across centres were in the range of ₹ 27-29 per kg during April, 2014 to March, 2015 whereas it lays between ₹ 25-28 per kg during April, 2013 to March, 2014. 

Pulses 

As per 2nd Advance Estimates 2014-15 released by Ministry of Agriculture and Cooperation, area under pulses is reported at 233.7 lakhs hectare which is lower by 5.73 per cent as compared to the 247.9 lakh hectare as per 2nd Advance Estimate of last year published by DAC, Ministry of Agriculture. Areas under tur (Kharif) and gram (Rabi) has decreased during the season by 4.68 per cent and 13.45 per cent whereas area under urad (Kharif and Rabi) and moong (Kharif and Rabi) has increased by 6.78 per cent and 4.77 per cent respectively as compared to the corresponding period last year. As per the 2nd Advance Estimates for 2014-15, pulses production is estimated at 184.3 lakh tonnes as against the 2nd Advance Estimate of 2013-14 at 197.7 lakh tonnes. Production of major pulses for 2014-15 is estimated at (figures in brackets indicate the 2nd advance estimate for 2013-14): Tur 27.5 lakh tonnes (33.4 lakh tonnes), Moong 13.9 lakh tonnes (12.8 lakh tonnes), gram 82.8 lakh tonnes (97.9 lakh tonnes)and Urad 16.1 lakh tonnes (15.9 lakh tonnes). 

Edible Oils 

As per 2nd Advance Estimates for the year 2014-15, production of total nine oilseeds is estimated at 298.32 lakh tonnes as against 329.83 lakh tonnes during the corresponding last year, shows a decrease of 9.57 per cent in production. This is due to the decrease in the production of groundnut to 74.68 lakh tonnes from 91.40 lakh tonnes, rapeseed and mustard to 73.63 lakh tonnes from 82.51 lakh tonnes, safflower to 0.78 lakh tonnes from 1.17 lakh tonnes and soyabean to 116.41 lakh tonnes from 124.48 lakh tonnes. Whereas, the production of castor seed has increased to 19.11 lakh tonnes from 16.46 lakh tonnes and sesamum to 7.01 lakh tonnes from 6.72 lakh tonnes over the same period of previous year. 

Vegetables 

Vegetable prices fluctuate depending on the availability and seasonal factors. Government kept a close watch on the prices and availability of vegetables, especially onion, potato and tomato. 

Onion 

As per 1st Advance Estimate 2014-15 of National Horticultural Board, area under onion cultivation 

has been estimated at 11.9 lakh hectare during 2014-15 which is 0.83 per cent lower than the previous year. The production of onion is estimated at 193.6 lakh tonnes during 2014-15 as compared to 194.0 lakh tonnes during 2013-14 which is 0.20 per cent lower than the previous year. A quantity of 13.58 lakh tonnes of onion was exported during 2013-14 as against 18.22 lakh tonnes during 2012-13. In current year 2014-15, 8.8 lakh tonnes of onion has been exported. Onion is mainly exported to Bangladesh, Malaysia, Dubai, Sri Lanka, Bahrain, Nepal, Singapore, Muscat, Kuwait, Doha/Qatar, Mauritius, etc. The all India monthly average retail prices of onion across centres were in the range of ₹ 17-28 per kg during April, 2014 to March, 2015 as compared to ₹ 17-57 per kg during April, 2013 to March, 2014. 

Tomato 

The area and production of tomato during 2014-15 (1st Advance Estimate) is 8.5 lakh hectares and 183.1 lakh tonnes as compared to area of 8.8 lakh hectares and production of 187.4 lakh tonnes during 2013-14 (Final Estimate). The all India monthly average retail prices of tomato across centres were in the range of ₹ 17-50 per kg during April, 2014 to March, 2015 as compared to ₹ 16-44 per kg during April, 2013 to March, 2014. 

Milk 

The all India monthly average retail prices of milk across centres were in the range of ₹ 36-39 per litre during April, 2014 to March, 2015 as compared to ₹ 33-36 per litre during April, 2013 to March, 2014.