GOI is trying to dismantle PDS system and MSP: AIKS

Among AIKS recommendations are the strengthening of the FCI and expansion of PDS System

Image courtesy: CITU Facebook page

All India Kisan Sabha (AIKS) has written a letter to Prime Minister Narendra Modi on the nationwide agitation outside FCI offices on April 5, 2021


Shri Narendra Modi,

Prime Minister of India

New Delhi-110001

Dear Pradhan Mantri ji,

On April 5, 2021, the Samyukta Kisan Morcha (SKM) had given a nationwide call to gherao offices of the Food Corporation of India (FCI) as part of its FCI Bachao Divas, to oppose the Government of India’s (GOI) attempts to dismantle both the PDS food distribution and the MSP procurement. The All India Kisan Sabha (AIKS), as a constituent of the SKM, has fully supported this call.

You are aware that lakhs of Kisans have been camping at the various Delhi borders for nearly four and a half months since November 26, 2020, despite the bitter cold, torrential rains and now the scorching heat. They are being supported by millions of farmers all over the country. All of them have been demanding the repeal of the three Farm Laws, a law guaranteeing MSP and procurement at remunerative prices, and withdrawal of the Electricity and Pollution Bills. Unfortunately, your government has not conceded even a single of these demands and has stopped all discussion with the SKM after January 22, 2021.

Also read: Protests against the New Food Corporation of India Guidelines

The attack of your central government on the FCI, MSP, procurement of food grains and the public distribution system began with the Report of the Shanta Kumar Committee placed in January 2015. It is recommended as follows:

  1. Reduce the number of beneficiaries under the Food Security Act—from the then 67 per cent to 40 per cent. 
  2. Allow private players to procure and store food grains. 
  3. Stop bonuses on minimum support price (MSP) paid by states to farmers, and adopt the cash transfer system so that MSP and food subsidy amounts can be directly transferred to the accounts of farmers and food security beneficiaries. 
  4. FCI should involve itself in full-fledged grains procurement only in those states which are poor in procurement. In the case of those states which are performing well, like Haryana, Punjab, Andhra Pradesh, Chhattisgarh, Madhya Pradesh and Odisha, the states should do the procurement.

Also read: Silence of the People of Tamilnadu- Awaiting message to India

It is evident that the three Farm Laws enacted by your government carry forward some of these recommendations. They compromise the FCI, MSP, PDS and procurement of food grains.

The GOI claims that the cost of handling food storage is huge, Rs 37/kg for rice and Rs 27/kg for wheat. For the last several years, GOI has not cleared all dues of this FCI expense, with the result that the total debt on FCI today is Rs 3.81 lakh crores. It pays more than 8% interest on this. On the contrary, for the last several years the budget of the FCI has been reduced. Recently the FCI also changed the rules for the procurement of crops which will increase problems of sale by sharecroppers. FCI’s procurement centres have also been reduced.

Under the Essential Commodities Amendment Act 2020, the GOI has freed up stock limits by all private traders and corporates and permitted annual increase in food grain prices by 50%. This will increase food grain hoarding, profiteering and black marketing. The new Mandi Act will promote private mandis and will practically wind up government procurement and MSP rates. Food grains will be handled totally by the private sector. The Acts will increase control of the private sector in food grains storage, cold storage, food processing and marketing. Ultimately the Government plans to wind up subsidized food distribution under PDS and reduce it to a cash transfer scheme under pressure from the WTO and imperialist countries like the USA. It also plans to sell off the FCI warehouses to the private sector to pay off the debts. 

Also read: Maharashtra Home Minister Anil Deshmukh Resigns Amid CBI Probe

The GOI is responsible for the food security of our country and for this it has to procure food grains, maintain food stocks to tide over scarcities and calamities and distribute and provide food grains to the poor to ensure that people are not forced to remain hungry. The budget allocation for food subsidy continues to remain stagnant at around Rs 1,15,000 crore for the last several years and even this amount is not fully spent by the government. There are today 81.35 crore PDS beneficiaries, granted 5 kg food grains per month and they will be forced to buy from the open market if PDS is wound up. PDS supplies around 50 million tonnes of food grains to the poor. The Niti Aayog has already recommended that 60 percent of the ration cards in urban areas and 40 percent of the ration cards in rural areas must be reduced. If the poor have to buy from the open market they will starve and deaths due to hunger will increase. It is only the private corporates, both domestic and foreign, that will benefit.

The GOI claims incorrectly that there is surplus food in India. It states that it has more than double the required food stock of around 42 million tonnes. This is mainly because food has not been adequately supplied to the poor and the needy. India is shockingly rated at 94 out of 107 countries in the Global Hunger Index. Its score of 27.2 shows a serious hunger situation in the country and over the last few years this has worsened. It shows that around 35% of our population is undernourished.

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It is a serious matter of the future of both food growers and food eaters, hence we raise the demands for strengthening the FCI, guaranteeing procurement of all crops at MSP and expanding and making the PDS run efficiently. Apart from reiterating our fundamental demands of this historic farmers’ struggle given above, our specific demands relating to the FCI, MSP, PDS and procurement are the following:

  1. The FCI must be strengthened by increasing its budget substantially and utilizing it completely. The FCI loan and interest must be fully paid off by the GOI. FCI’s procurement centres must be greatly increased all over the country so that farmers can get some guarantee of MSP.
  2. All purchases must be done on remunerative MSP and strict action must be taken against buyers who purchase below that MSP. The process of procurement must be completed in minimum time. It must be ensured that farmers do not face any problems due to lack of bags etc.
  3.   The source of food security for millions of people is the PDS service through FCI. Storage must be continued by the Government and run smoothly so that people do not have to suffer from hunger. All attempts to cut down the number of ration cards must be immediately withdrawn.
  4. The PDS must be expanded towards universalization. Until then it must ensure that the 81.35 crore PDS beneficiaries get 15 Kg food grains, and 1 Kg each of Dal, Sugar and Cooking Oil per head per month. 
  5. Government must roll back the provision of direct payment to farmers’ bank accounts. Implementing it in haste will lead to many complex problems that will prevent many farmers from getting the price of their crops. The decision to submit Jamabandhi for the procurement of wheat must be withdrawn.
  6. FCI employees and workers who are on a contract must be given permanent charges and all vacant posts must be filled up immediately.

Also read: Protesting farmers including women lathi charged by Police in Rohtak

We urge your government to concede the above demands at the earliest, failing which our united struggle will have to be further intensified.

Thanking you,                                                                                     

 Yours faithfully

Sd/-Hannan Mollah

General Secretary 

Sd/-Dr Ashok Dhawale                                                                                               President


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June 2024


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