New committee meets in bid to reform 'wasteful' food corporation

By RJ Whitehead

- Last updated on GMT

Related tags Bharatiya janata party

Committee chairman Shanta Kumar
Committee chairman Shanta Kumar
A high-level committee has met for the first time to investigate a restructure of the often-beleaguered Food Corporation of India (FCI) as the food-grains authority looks to strengthen and integrate its supply chain.

The FCI is the government agency charged with procuring and distributing grain, and is central to India’s Food Security Act, which was brought in by the former Congress-led government to supply discounted commodities to at least 800m of the country’s poor. During its general election campaign, the now ruling Bharatiya Janata party pledged to reform the FCI.

MSP reform a possibility

The new committee has been ordered to look at the way the FCI’s minimum support price (MSP) functions, and find solutions to India’s largely shambolic public food storage and security systems. Currently, 98% of the corporation’s budget is at the mercy of MSP, over which it has no control.

In the meeting, the committee called for a public consultation on issues facing the FCI, especially the corporation’s management of grain and the public distribution system.

Led by chairman Shanta Kumar, the former chief minister of Himachal Pradesh, the committee includes logistics experts and government officials. At this stage, it is focusing on identifying the public and private sector bodies the committee sees as being central to the process.

"This was our first meeting and we discussed the number of issues at length​," said Kumar, although details of the discussions have not been released.

According to Business Standard, which cited economists and academics on the committee, the panel looked at bringing greater private participation to the storage and distribution of grains in a move to avoid wastage and drive greater efficiency. 

The sources added that the need to explore an option to pay subsidies directly to beneficiaries had also been discussed.

Poor public perception

FCI chairman and managing director C Viswanath used the meeting to provide a detailed presentation on the corporation’s mandate and organisational structure, the issues it faces and its vision for future. 

[It] saw fruitful discussions and deliberations among all the committee members​,” Viswanath said afterwards.

According to a statement by the FCI, the watershed move comes in the wake of a major effort to alter its “commonly perceived image as a corporation plagued by functional and cost inefficiencies​”. 

The Ministry of Consumer Affairs, Food and Public Distribution set up the eight-member committee last month with a brief to recommend ways to restructure the FCI after considering various aspects of its current operations. 

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Reorganise and modergise FCI

Posted by +Dr. S. K. Berry,

FCI needs an overhoul of organisational (manpower) structure and physical infrastucture to weed out old storage structures and introduce modern silo system. Storage in open needs to be completely given up. Quality control both at procurement and storage should be revamped and modernised to speed up the distribution process. Government should phase out grain subsidy and introduce cash subsidy credited directly to the consumer bank account.

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Modernise FCI

Posted by Dr J S yadav,

Now the time has come when FCI should modernise its procurement, online monitoring of procurement, storage, stocks and sales and also decentralize its structure into regional companies and continue its operation round the year on economic consideration - fully electronise, more precisely like China Grain wholesale at Shenzhen.2) Stop offering commission to commission Agents operating in Wholesale markets which is approx 6 percent in total procurement and real root of corruption

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