From The Hindu Archives, January 8, 1976: World Bank aid for food godowns

MADRAS, Jan. 7: The Food Corporation of India, which is to build up a sizable buffer stock in the wake of plentiful food production and continuing imports, is facing a major problem, that of creating additional storage capacity, and is looking to the World Bank for aid.

The World Bank has shown interest in the programme, which the FCI has already initiated, and Sir John Crawford, Adviser to the Bank’s President, Mr. Robert McNamara, is expected to visit India on January 16 for talks. The World Bank may give aid if it is convinced that the creation of such additional storage would lead to increased food production and more sales through the public distribution system.

Mr. A.K. Dutt, Managing Director of FCI, told newsmen that on the whole this year was going to be a year of plenty and “this creates a problem of storage for us because there is going to be very heavy procurement and imports will continue.” The FCI hoped to build up a sizable buffer stock – 7.5 million tonnes at the end of March and anything between 11 and 12 million tonnes in the peak season July-August. With imports also continuing the FCI was faced with a “situation of emergency” with regard to storage, he said.

Mr. Dutt said that the Planning Commission and the Finance Ministry had agreed recently to give FCI more funds this year and next for creating additional storage. “Our plans are to complete 6.35 lakh tonnes of additional pucca storage by March 1977 and another four lakh tonnes by the end of March 1978.” In addition, to cope with the present emergency situation, the FCI was going in for CAP (cover and plinth) storage on a large scale in “drier States like Punjab, Haryana and MP,” and areas in southern States where rainfall was meagre. All the State Governments were aware of the situation and had agreed to find space and land for temporary and pucca godowns. (Under the CAP storage system, bags of grains are stored in the open on plinth and crates, covered by polythene).

The Managing Director said that the Tamil Nadu Government proposed to set up a committee headed by the Food Secretary to achieve “perfect co-ordination” between the various agencies in constructing the godowns. The FCI this year would take over distribution of imported fertilizers from the Department of Agriculture. It would be paying for the imported stocks with bank credit. “Budgetary financing will be replaced by bank financing and our credit limit with the banks will go up from Rs. 800 crores now to Rs. 1,200 crores in June-July. We are the biggest borrowers from banks,” he said.

The FCI had no difficulty in procurement and, as regards imported food, its discharge operations in ports had improved greatly. The productivity of its employees had increased. There was also no difficulty about wagon supply generally.