Indian Economy
General Knowledge

Food Management

Food Management

❖ Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices, a guarantee price to save farmers from distress sale.
❖ The MSPs are announced at the beginning of the sowing season for certain crops on the basis of the recommendations of the commission for agricultural costs and prices.

Market Interventions Scheme

❖ The Market Intervention Scheme (MIS) is similar to MSP, which is implemented on the request of state governments for procurement of perishable and horticultural commodities in the event of fall in marked prices.
❖ The scheme is implemented when there is at least 10% increase in production or 10% decrease in the ruling rates over the previous normal year.

Procurement Prices

In 1966-67, the Government of India, for the first time, announced a procurement price for wheat, for a bit higher price than its MSP (the purpose being security of food procurement of the PDS).

Issue Price

The price at which the government allows offtake of food grains from the Food Corporation of India (FCI) or the price at which the FCI sells its food grains.

Buffer Stock

❖ India has a policy of maintaining a minimum reserve of food grains (only for wheat and rice) so that food is available throughout the country at affordable prices round the year.
❖ The main supply from here goes to the TPDS (the PDS was restructured as the targeted PDS in 1997) and, at times, goes for open marked sale to check the rising prices, if needed.

Public Distribution System (PDS)

❖ Presently, PDS is operated under the joint responsibility of the Central and the State governments. The Central government, though FCI, has assumed the responsibility for procurement, storage, transportation, and bulk allocation of food grains to the state government.
❖ The operational responsibility including allocation within states, identification of families below the poverty line, issue of ration cards and supervision of the functioning of fair price shops rest with the state governments.
❖ Under the PDS, presently, the commodities—namely wheat, rice, sugar, and kerosene are being allocated to the states/UTs for distribution. Some state/UTs also distribute additional/items of mass consumption like oils, iodized salt, spices, etc.

Food Corporation of India

❖ The Food Corporation of India was set up on 14 January, 1965, having its first District Office at Thanjavur—and headquarters at Delhi under the Food Corporations Act, 1964.
❖ The Food Corporation of India has been set up for the implementation of the following objectives of the National Food Policy :
  • Effective price support operations for safeguarding the interests of the farmers
  • Distribution of food grains throughout the country for Public Distribution System
  • Maintaining satisfactory level of operational and buffer stocks of foodgrains to ensure National Food Security
  • Regulate market price to provide food grains to consumers at a reliable price

National Food Security Act

❖ The National Food Security Act, 2013 is also known as the Right to Food Act. It is an Act which aims to provide subsidized food grains to approximately two-thirds of India’s 1.2 billion people.
❖ It includes the Midday Meal Scheme, Integrated Child Development Services scheme, and the Public Distribution System. Further, the NFSA 2013 recognizes maternity entitlements. The Midday Meal Scheme and the Integrated Child Development Services Scheme are universal in nature, whereas the PDS will reach about two-thirds of the population.
❖ Under the provisions of the Bill, beneficiaries of the Public Distribution System (or PDS) are entitled to 5 kilograms (11 lb) per person per month of cereals at a subsidized prices.
❖ Pregnant women, lactating mothers, and certain categories of children are eligible for daily free cereals.

Crop Insurance

Crop insurance is the insurance given to agricultural producers, including farmers, ranchers, and others to protect themselves against either the loss of their crops due to natural disasters, such as hail, drought, and floods or the loss of revenue due to declines in the prices of agricultural commodities.

The Pradhan Mantri Fasal BimaYojana (Prime Minister’s Crop Insurance Scheme)

It was launched by Prime Minister of India Narendra Modi on 18 February, 2016. It envisages a uniform premium of only 2% to be paid by farmers for Kharif crops and 1.5% for Rabi crops.
    This insurance scheme, unlike the previous ones, covers local calamities too, such as landslide, hailstorm, inundation, etc. Inundation was not covered by the previous schemes.