Reduce foodgrain prices for APL population, says panel

By Our Special Correspondent

NEW DELHI, MAY 15. At a time when the Government is saddled with burgeoning foodstocks and low offtake, the high-level committee entrusted with the task of formulating a long-term Grain Policy has recommended that the Public Distribution System (PDS) foodgrain price for the Above the Poverty Line (APL) population be revised downwards. After the issue price for APL became higher than the open market price, offtake has plummeted.

In its interim report submitted to the Government, the Committee suggested reduction in APL price to 80 per cent, excluding statutory levies, or about 75 per cent of the present economic cost, including levies. At present, the APL price is set at 100 per cent of the economic cost to the Food Corporation of India (FCI). The Below the Poverty Line (BPL) price should be 50 per cent of the economic cost, excluding statutory levies, to improve offtake and viability of the network.

Further, the Committee recommended that each BPL family be permitted to purchase up to 5 kg per person at BPL rates per month or an allocation of 20 kg per family, whichever was high. For areas covered under the Revamped PDS (1,775 blocks in remote and far flung areas) and areas currently drought- affected or ravaged by natural calamities, a universal PDS be introduced at BPL prices and quota.

The Committee, chaired by Prof. Abhijit Sen, till recently Chairman of the Commission for Agriculture Costs and Prices, opposed the relaxation of specification of quality for purchase of foodgrains for the central pool on representations from various grain-producing States.

It recommended strict adherence to the ``fair average quality'' norms. ``Relaxation, if allowed on request from any State Government, should be on an appropriate price reduction besides exemption from statutory State levies,'' the Committee said. Besides, it wanted that a singular minimum support price be set for paddy and levy price for rice be fixed for a single grade as against `common' and `grade A' at present. The Committee suggested that the Food Corporation of India (FCI) be exempt from paying statutory levies to State Governments for procuring foodgrains. The necessary amendments in the Sales Tax Acts of various States should be carried out for the purpose.

It felt that the payment of statutory levies by the FCI were in effect transfers from the Centre to the State Government and should be treated as such. Statutory levies on purchase of foodgrains amount to as much as 12.5 per cent of the procurement prices in certain States, which should be settled separately between the Centre and the State Governments without involving the FCI or its economic costs.

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