Government of India constitutes various committees and Commissions to review and monitor any legislative process. Shanta Kumar Committee is one of them.
Shanta Kumar Committee
This was a high level committee (HLC) constituted by Government of India under the chairmanship of Dr. Shanta Kumar and six other members. It was constituted on 20th August 2014.
This committee report was published in January 2015 under the name of Report of High Level Committee on Reorientation the Role and Restructuring of Food Corporation of India.
Under the preview of National Food Security Act 2013, this committee received more than 300 representatives and their valuable suggestions were taken into consideration for this report.
Members of Shanta Kumar Committee
Here is the list of members of Shanta Kumar Committee.
- C Viswanath (FCI Chairman-cum-Managing Director)
- Ram Sewak Sharma (Electronic and IT Secretary)
- Ashok Gulati (Former Chairman of Commission for Agricultural Costs and Prices)
- G Raghuram (Academician)
- Gunmadi Nancharaiah (Academician)
- Chief Secretaries of Punjab and Chhattisgarh
Why Shanta Kumar Committee was Constituted?
This committee was constituted to suggest restructuring of Food Corporation of India. Restructuring of Food Corporation in India is meant to improve its operational and financial management.
It was about to suggest on cost-effective models for storage and movement of grains, Role of Food Corporation Of India role in Minimum Support Prices (M.S.P) operations, Storage and Distribution of Food-grains.
What was the need of Committee?
We need to understand that before the establishment of Food Corporation of India in 1965, India was struggling to provide food security to its citizens. Farmers were not getting appropriate price for their harvest. Amidst such challenges, this institution was setup.
Food Corporation of India played a vital role in the success of Public Distribution System, reserving the food-grains to stabilize the market from inflation and financial support to the farmers.
But there are some challenges like lack of benefits of procurement in many states of the country and leakage in the targeted public distribution system [It was estimated 13.7% in 2015].
It was also a fact that National Food Security Act 2013 by UPA regime guaranteed 7 kg food grains per person at Rs. 3 per kg for rice, Rs. 2 per kg for wheat.
NDA government followed the tradition under the ambit of National Food Security Act 2013 and bought more Food-Grains compared to previous Governments. But it is seen as burden on Indian Economy. Government wanted to make system better.
Recommendation of Shanta Kumar Committee
- It has been suggested to hand over procurement of wheat, paddy and rice to six States which include Punjab, Haryana, Andhra Pradesh, Chhattisgarh and Odisha. These states have gained sufficient experience in this regard and they have created reasonable infrastructure for procurement.
- Food Corporation of India will accept only the surplus from these states.
- Food Corporation of India should focus on other states where farmers are facing distress sale below MSP.
- Grain storage needs to be outsourced to private and government agencies like state-owned Central Warehousing Corporation (CWC), State Warehousing Corporations (SWCs) and private organisations.
- The statutory levies needs to be brought down uniformly to 3-4 percent of MSP. Surely states will face the loss of revenue but it should be compensated through the diversification package for the next 3-5 years.
- Quality check during procurement should be strictly adhered to, and it should be done by Food Corporation of India or any other third party agency.
- End-to-end computerization & vigilance committee should be setup to check leakage in Targeted Public Distribution System.
Farmer Protest 2020
Farmer Protest 2020 was started after passing of 3 farmers bills in Indian Parliament by Government of India. These bills are:
- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 (FAPAFS)
- Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 (FPTC)
- Essential Commodities (Amendment) Act, 2020 (EC)
In Reference of Benefits to Farmers
We should see things from Shanta Committee recommendations. According to the committee, only 6% farmers in the country gained after selling wheat, paddy and rice to procurement agency.
Now question arises, how much income other 94% farmers in the country received? Where they sold their harvest? Even then, country has surplus reserve of food-grains. It is much above the buffer stock norms.
Buffer Stock may be defined as an extra stock of Agricultural Commodities for the purpose of stabilizing the prices in economy and assurance of food-supply in case of any emergency.
It can be assumed that farmers sold their harvest to their contract firms, in an open market or any money-lander. One of the reason to sell their harvest is the absence of warehouse in many states.
It is important because in many states, there are no warehouses to store food-grains.
This committee recommend the need to enhance the storage capabilities and suggest for private partnership in expanding the storage limits.
Recent agitation by farmers in Haryana against Adani storage Silos in the state is an example. Indeed it is completely denied by Adani Group stating, “It only manages storage units for FCI and the company neither procures grains from farmers neither decides the pricing of food-Grains.”
If farmers are agitating against warehouse construction by Private companies, its foundation was laid by Shanta Kumar Committee much before.
In Reference of MSP
Keeping it concise, much of the farmer’s worries are related to MSP. According to Shanta Kumar Committee, MSP support primarily operates in Wheat and Rice. It is also in few states. Government or state warehouses and reserving agencies are full of Wheat and Rice.
Government first spent large amount of money to provide MSP to the farmers for these crops. Later a huge amount of money is spent in preserving the food-grains.
There are other agricultural products other than Wheat and Rice where Price Support must be provided. It means to develop a system to address farmers what to produce & what not.
It is also a fact that our nation is bound to some trade agreement with other countries and WTO. We have seen that we are surplus in Wheat but have great deficit in pulses.
Trade policy works independently of MSP policy. According to the report, it has been seen that import of pulses comes at much lower price than MSP. Now what should Government do?
Irrespective of paying MSP to the farmers, Government might choose import of pulses as it is cheaper for them. Hence trade policy demand is an abolition of MSP.
It is also a fact that contract farming is not a new concept in Punjab. PepsiCo has been involved in contract farming in Punjab for three decades now. PepsiCo established its first unit in Punjab in the late after signing a memorandum of understanding with the state government.
Farmers have mixed reaction on such agreements. Government is allowing contract farming under the ambit of new law. Shanta Kumar Committee recommends to identify new ways to improve the income of farmers.
We have two parallel establishment after the advent of these laws. One is traditional APMC system and another one is private market for procurement of harvest.
In APMC system, Minimum Support Price is announced by Government through an administrative order while price will be decided prior to the harvest with the farmer by private players.
It is the possibility that private players will settle price according to the trade policy norms and this will automatically affect the system of APMC storage system.
Whether APMC system will remain alive or it will become useless – answer lies in the future. But through these reforms, Government is trying to adhered itself to trade policy norms and WTO guidelines.
Simultaneously Government is trying to associate farmers with new system of competitive agricultural practices. There may be loss or profit.
Cost effective model of storage and distribution of food-grains cannot possible without addressing MSP and private partnership in agriculture. This is new age Mantra of Government.