Does India Have Enough Food Grain Stocks?

India Tracker decided to go to the website of Food Corporation of India to check the status of buffer stocks

Many media outlets have indicated in recent times that the level and quantum of buffer stocks of primary food grains like rice, wheat and unmilled paddy are approaching dangerous levels. Apparently, it is dangerous because the Russian invasion of Ukraine has led to a phenomenal rise in the price of food grains in global markets. In such a case, and with dwindling foreign exchange reserves, India cannot afford to land in a situation where it needs to import food grains. Some analysts argue that it was this apprehension that prompted the government to completely ban the export of wheat by private traders a few months ago. The government has also put severe restrictions on the export of wheat flour or atta. Intrigued by this commentary and the alarm about dwindling buffer stocks of food grains, India Tracker decided to go to the website of Food Corporation of India to check the status of buffer stocks. Thanks to the digital revolution witnessed in the last decade, even inefficient organisations like the FCI have the latest data on their websites.

So what did India Tracker find out? Well, food grain stocks are lower than what they were a few years ago, but not by an alarming amount. In July 2022, total stocks of rice, wheat and unmilled paddy is 83.3 million tons. In January this year, the total food grains stocks stood at about 120 million tons. If one examines the data closely, food grains stocks increased from 56.4 million tons in January 2016 to 120 million tons in January 2022. As the accompanying chart shows, the food grains stock quantum between 2016 to 2022 has fluctuated between 60 million tons to 120 million tons. All along, there has been no apprehension that food grain stocks are at dangerously low levels. In fact, most analysts have argued that is it wasteful for the FCI to stock such massive quantities because a lot of it goes waste, besides encouraging corrupt officials to indulge in their own private trade at the cost of the government.

The reason, fears are expressed over the buffer stocks of food grains now is primarily because of arguably the largest welfare program anywhere in the world by the current government. When Covid struck India, a rigid lock down was ensured which completely disrupted economic activity. To help the poor survive the disruption, the government launched a scheme to provide 5 kilograms of free food grain to 800 million Indians in April, 2020. The economy has recovered and GDP growth that crashed in the early stages of pandemic has also rebounded. But the scheme still continues and there is talk that the government may continue it till March, 2023. This obviously means more food grains stock will be used up to provide free food. But it should not be alarming as the Kharif harvest is due in a few months. And stocks will be replenished once again.