The government’s rice stocks continue to surge, even though it is trying to sell and distribute large amounts of it using different programs. According to the sources, the Central rice stock (stores by the Food Corporation of India (FCI) is around 47 million tonnes (MT). Surprisingly, this is more than 3.5 times the minimum stock needed, as 10.25 MT for October.
How will be Govt’s rice stocks utilized?
The government’s rice stock utilized by selling in the open market (through auctions), supplying to states for welfare schemes, using it for ethanol production and lastly, selling subsidized Bharat rice to consumers. However, despite, utilizing the rice stocks in such manner, it keeps rising. Notably, rice sales through open market have already hot a record 5.6 MT. The government is expected to release 6-7 MT of rice this year to reduce the surplus stocks.
To combat this, FCI is buying more rice, paddy procurement for new season has already climbed to 3.41 MT compared to just 0.91 MT at the same time previous year.
Problems emerge due to Surplus rice stocks
There are several problems that emerge due to surplus rice stocks. These are storing rice costs money. If rice stocks remain too high, it will increase the food subsidy bill. The govt. had estimated a food subsidy of 2.03 lakh crore for FY 25, but it could rise by Rs 22, 000 crore just due to the cost of storing extra rice.
Interestingly, around 810 million people get 5 kg of free food grains per month under the (Pradhan Mantri Garib Kalyan Anna Yojana) PMGKAY scheme that has now been extended till 2028. The FCI purchases around 52-53 MT of rice from farmers and supplies 36-38 MT for free distribution every year.