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SPV for grain movement on cards

posted Jan 27, 2012, 12:16 AM by Puneet Goyal   [ updated Jan 27, 2012, 12:17 AM ]
Food ministry plans special purpose vehicle with railways for smooth transportation dedicated corridors to be set up
Sanjeeb Mukherjee / New Delhi Jan 27, 2012, 00:01 IST

As the government plans to enact a food security law from the next financial year, the food ministry and the railways are working on setting up a special purpose vehicle (SPV) to finance faster movement of foodgrain from producing states to consuming ones.

The SPV will have equity contribution from both departments. It will work towards the establishment of dedicated corridors and procurement of trains and rakes for grain transportation.

Officials said the need to smoothen problems in transportation, particularly during the peak procurement season for wheat and rice, had become more important in view of the proposed Food Security Act. The law, which will give legal entitlement for foodgrain to 75 per cent of the rural population and 50 per cent of the urban population, will necessitate adequate quantities at all times to the consumer.

The proposal for a national foodgrain movement plan was initiated by Food Minister K V Thomas in June last year, following his meeting with Prime Minister Manmohan Singh. The idea was to avoid delays in the movement of foodgrain from producing states to consuming ones, due to long distance and lack of good transport facilities.

In 2010-11, railways transported 28.35 million tonnes (mt) of foodgrain inter-state, 12.3 per cent more than the previous year.

It handled 12,322 rakes, 11 per cent more than the previous year, according to Food Corporation of India (FCI) data.

The officials said as the foodgrain surplus was mainly confined to the northern states of Punjab, Haryana and Uttar Pradesh, transportation involved long distances.

Stocks procured from markets and purchase centres are first kept in the nearest depots and from there, dispatched to recipient states. Figures show FCI moves 25 mt of foodgrain annually over a distance of 1,500 km by rail, road and sea. The highest quantity is transported by the railways.

However, the movement gets difficult during the peak procurement season, as the quantum of arrivals far outnumbers the quantity that can be carried by railway wagons over long routes.

The peak season for wheat starts from April and goes up to June-July. For rice, it stretches from around October to December-January.

The officials said the creation of a dedicated division in FCI and the Railway Board, both at the Central-end and state levels, to deal with operational aspects of movement of foodgrain, like availability and development of railway wagons, could also be considered at a later stage. India targets to produce a record 245 mt of foodgrain in 2011-12, two per cent more than the previous year.