Scroll.in article about wasted grain is result of misinterpreted terminology, says FCI

A note from Sudeep Singh, Executive Director (Quality Control), Food Corporation of India

Kindy refer to the above article “India let 65 lakh tonnes of grain go to waste in four months, even as the poor went hungry” published on June 3 which is based on the extracts of a Research Paper titled “Covid 19 Lockdown – Impact on Agriculture and Rural Economy” published by Society for Social and Economic Research authored by Vikas Rawal, Manish Kumar, Ankur Verma and Jesim Pais. It is surprising to note that patently wrong information has been published in your online news portal without making any effort to check the facts and thereby giving completely wrong information to the public at large that 65 Lakh MT food grain has been wasted during last four months. This is a blatantly unfair interpretation of the actual stock position and doesn’t do justice to the performance of the Food Corporation of India.

According to the article and the data given in Table 5, it has been reported that 71.81 Lakh MT food grains is “not readily issuable”. This has been highlighted in the heading of the article as 65 Lakh MT food grains been allowed to go waste, without even bothering to cross check the terminology used in the context of the process of procurement and movement of stocks of food grains in FCI.

In the month of April and May, Rabi season wheat procurement operations happen in a large scale. During the ongoing wheat procurement season, which started on 15.04.20, a quantity of 365 Lakh MT wheat has already been procured by government agencies. The wheat stocks procured in purchase centers called “mandies” is shifted to storage points over a period of time. There is a certain time lag between procurement and transferring these stocks into the storage facilities as it involves large scale logistic operations involving labor and trucks. At any given point in time during procurement operations, there will be some wheat stocks procured but yet to be shifted to storage facilities as it is an ongoing exercise. As on 01.05.2020 a quantity of 56.35 Lakh MT procured wheat stocks was yet to be shifted from mandies to storage points. These stocks were subsequently shifted and taken into central pool account.

Similarly, at any given point in time, there will be some stocks in transit as FCI continuously moves stocks from surplus states to consuming states. During the current pandemic demand for food grains had gone up substantially due to additional allocations under Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY) and FCI was working on a 24/7 basis to meet this additional requirements. FCI has done all-time record movement of stocks during April 2020 and the stocks which were transiting from surplus to consuming states as on 01.05.2020 was also higher than the normal average stocks in transit. The quantity of food grain in transit as on 01.05.2020 was 14.01 Lakh MT. These stocks subsequently reached the respective destinations and were issued to state governments for distribution under various schemes of Government of India.

It is apparent from the news report that this quantity of wheat stocks lying in procurement centers to be shifted to storage points as well as rice and wheat under transit to consuming states from procuring states has been labeled as “wasted food grains” and has been highlighted in the article. It is a matter of grave concern that neither the researchers nor your online news portal made any effort to understand the data/terminology or verify the facts before publishing a report which could tarnish the image of a public organisation like FCI engaged in front line of fight against Covid 19.

We have spoken to Prof. Vikas Rawal, who is one of the co-authors and he confirmed that the data was taken by interpreting the stocks lying in mandies and in transit as “not readily issuable”. It is pertinent to point out that both stock in mandies and stock in transit are absolutely fit for human consumption and under no circumstances can be labelled as “food grains wasted”. This wrong portrayal of FCI misleads the readers and could have been avoided, if the authors/researchers had approached FCI for interpretation of terminology/data, which are used in a specific context to explain the status of the stocks held.

For the purpose of records, the actual quantity of central pool food grains damaged during last three years is given as below:

We hope that you will understand the gross misinterpretation that has happened in this case by publishing an imaginary figure of 71.8 Lakh MT as “wasted stocks”, when the actual quantity of food grains stocks that became non-issuable (damaged) during 2019-20 is just 1930 MTs, that too largely due to natural calamities like floods. I request you to kindly issue an immediate clarification on this issue considering the sensitive nature of the news and the adverse image it can create in the minds of general public about FCI.

Sudeep Singh
Executive Director (Quality Control)

Authors’ response: Solving the puzzle about quality of grain in FCI’s stocks

Vikas Rawal, Manish Kumar, Ankur Verma and Jesim Pais

We are thankful to Sudeep Singh, Executive Director (Quality Control), for sending a rejoinder to our paper and providing additional information on the situation of stocks held by FCI. We would like to explain our calculations and respond to his clarification. We hope that this would help in clarifying the situation.

Total stocks and readily issuable stocks

The FCI periodically provides data on “readily issuable stock” of wheat and rice in the central pool. These data are not provided systematically, and we had to dig out various pdf files from the archives of the website to compile as many data points as we could.

Among many other things discussed in our paper, we have pointed out that there has been a sudden increase in the difference between total stocks in the central pool and the “readily issuable stock”. From the data available to us, our interpretation was that some grain has become unfit for direct distribution and therefore has been excluded from the “readily issuable stock”. Table 1 shows the data on total stocks and “readily usable stocks” that we used. In our paper, we had presented the balance as grain that was “not readily issuable”.

Table 1. Total stock and “readily issuable stock” of wheat and rice in the central pool

What are the ‘readily issuable stocks’?

The “readily issuable stocks” exclude, apart from grain that is damaged, grain that is “in Transit/C&D Category/Upgradable”.

It is noteworthy that, as mentioned by Singh, and reproduced here as Table 2, the quantity of grain that is categorised as “damaged” is very small.

Table 2. The quantity of grain that was “damaged” in the central pool

However, the readily issuable grain excludes two other categories: grain that is in transit, and grain that is in Categories C and D.

We would like to first explain what are Categories C and D. The following text from the website of FCI summarises what are “C&D Category/upgradable” grains.

Sale of Non-Issuable (Upgradable) foodgrains Overview

“The Quality Control wing of FCI monitors the categorization of foodgrains. The stock of wheat which falls under A and B category is fit for human consumption whereas C & D category wheat can be utilized for human consumption after upgradation. In case of rice, A, B and C category rice it (sic.) fit for human consumption and D category rice can be utilized only after upgradation. The stock of foodgrains which is not fit for direct human consumption but can be utilized for human consumption after upgradation is called Non-Issuable (Upgradable) foodgrains.

When it is found that it is not operationally possible or economically viable to upgrade the stocks and the same cannot be issued through PDS/OWS, the stock is recommended for disposal through tender sale.”

— Source: http://fci.gov.in/sales.php?view=53

The Quality Control Manual provides further details about what these categories C and D are, and how are these meant to be used.

In the case of rice, D category stocks have “high percentage of loose bran and emitting musty smell”. “These stocks require to be aerated and/or cleaned, where necessary before issue. The stocks should conform to PFA requirements and the standing instructions for issues”.

In case of wheat, it mentions “C&D categories will be issued to Roller Flour Mills and in case of “D” where cleaning is required this should be got done. While issuing stocks to Roller Flour Mills according to instructions in force at the time of issue it should be clearly indicated on the despatch (/sic./) documents that such wheat is not for sale and direct consumption”. “A & B categories should be issued only to State Governments and Fair price shops and ‘A’ will be issued only after liquidating ‘B’ category stocks”.

“The below ‘D’ category wheat stocks should invariably be labelled “below ‘D’ category wheat beyond PFA and unfit for human consumption”.

It is clear from these that Category C and D, which are excluded from the “readily issuable stock”, refer to grain that is unfit for direct human consumption, though some of it can be made fit for consumption through upgradation (through segregation, cleaning, aeration, fumigation, pest control etc). In cases, where upgradation of the grain is uneconomical, FCI sells the grain for uses other than human consumption.

We would like to point out that FCI does not provide separate data on these categories, and this is the fundamental reason for contestation on these numbers. Although FCI provides information on grain that is non-issuable (damaged), it does not provide data on how much is the non-issuable (upgradable) grain. It also does not provide data on how much is the share of different categories (A, B, C and D) in the total grain. The ambiguity in these numbers and differences of interpretation arise because all these data are not provided by FCI.

The first missing piece in the jigsaw: grain in transit

FCI also does not separately provide data how much grain is in transit although these are also excluded from the “readily issuable grain”. Clubbing grain in transit with grain that is not issuable because of problems related to quality obfuscates the picture and is a major problem.

In this context, we are thankful that Singh has provided this information in his response. According to him, “the quantity of food grain in transit as on 01.05.2020 was 14.01 Lakh MT”. With this information available, we can exclude this from the overall balance and narrow down the gap further. Table 3 shows the quantity we are left with after the grain in transit is accounted for.

Table 3. The position of total stocks of wheat and rice on May 1, 2020

The second missing piece in the jigsaw: grain lying in the mandis

In the data provided on “readily issuable stocks”, the FCI specifies exactly what has been excluded from the “readily issuable stocks”. In the Table for May 1, 2020, it specifically says that “in Transit/C&D Category/Upgradable” are excluded (Appendix Table 1A). There is no mention of the grain that could be lying in the mandis or with the state agencies.

In contrast, Table for November 1, 2019 (Appendix Table 1C) clearly mentions that a small part of non-issuable (damaged) grain was with State-level agencies. None of the older data tables (reproduced in Appendix Table 1) that we could obtain mention exclusion of grain lying in the mandis.

According to Singh, the explanation lies in the fact that this grain is procured and is still lying in the mandis. It would have been helpful if this was mentioned in the table that was released by FCI. While Singh has made this clearer, there is some ambiguity in his statement. Singh has mentioned that, “As on 01.05.2020 a quantity of 56.35 Lakh MT procured wheat stocks was yet to be shifted from mandies to storage points. These stocks were subsequently shifted and taken into central pool account.”

This suggests that this grain was not a part of the central pool on May. If this were the case, the grain would not be included either in the data on central pool or in the data on “readily issuable stocks”.

However, it seems the data are in fact included in the central pool and not included in the “readily issuable stocks”, and this is not stated anywhere, resulting in this confusion. To confirm this, we have now dug out data for April and May for the last year. These are presented in Table 4. These show that there was a similar jump in the balance stock of wheat in May last year, pointing that this was a result of the recently procured grain lying in the mandis.

Table 4. Total stock and “readily issuable stock” of wheat and rice in the central pool, April 1 and May 1, 2019

We believe that this scope for misinterpretation could have been avoided if FCI had provided all the data clearly and transparently.

In particular, it would be useful if FCI separately provides the quantity of wheat and rice that are of different categories (A, B, C and D), the quantity that is in transit, and the quantity that is lying in mandis. A clearer note to the table where the data on “readily issuable grain” are provided would also be helpful.

We hope that the FCI will take care of this in the future.