Indian Agricultural: Growth, Generation, Policy & Problem Indian Agricultural | Page 43

Pg.no. 42
The Commission for Agricultural Cost and Prices (CACP)
This is a renewed version of the erstwhile Agricultural Price Commission (APC). It is the chief advisory
body on agriculture price policy. While recommending a price for a commodity the commission takes
into account, among other factors, the prices fixed in the previous year, trends in open market prices
reflecting overall shortages or surplus, the latest available estimates of cost of production and
changes in the input prices, the need for securing a balanced growth in the output of related crops,
reduction in inter states price dispersion, the likely effect of the recommended prices on the cost of
living and the general price level. At present, the main task of the commission is to recommend the
procurement prices for principal crops although its terms of reference are quite comprehensive.
The Food Corporation of India (FCI):
The FCI was set up in 1964 through an act of parliament. Its primary responsibility is to undertake
purchase, storage, transportation, distribution and sale of food grains. It also aims to ensure that the
primary producer gets the minimum price set by the government and the consumer is protected from
the vagaries of speculative trades. FCI has been the main filed instrument of the government of
India's food policy since its establishment. On behalf of the government, it looks after the price
support, procurement, storage, interstate movement and distribution operations of food grains. The
FCI also provides price support to farmers by purchasing quantities that could not fetch minimum
support prices in the market, stores the grains scientifically, moves grains from surplus to deficit areas
and makes available grains to states for the purpose of public distribution system. On behalf of the
central Government it is authorized to handle all purchase, storage, movement, distribution and sale
of food grains besides engaging itself in import and export of food grains as and when necessary.
Since April 1969, FCI is also acting as the sole agency of the central Government for state trading in
food grains. It helps government to achieve the following objectives. 1. Guarantee of minimum
support price to the producers. 2. Restrictions on the interstate movement of food grains by private
traders. 3. Imports of food grains where necessary 4. The maintenance of Public Distribution System
through statutory and other controls. 5. Building up of the required buffer stocks of grains.
The Role of the Food Corporation of India (FCI):
The Committee expressed satisfaction over the role FCI has performed over the years. However, it
criticized the FCI for its predominant role in procuring from a few surplus states rather than ensuring
price support to cultivators throughout the country and developing markets for grain in relatively
underdeveloped regions. The Committee recommended additional budgetary support for FCI to
perform its remaining tasks. Regarding the management of FCI, the Committee did not envisage any
basic change in the structure of the FCI. But it called for giving the FCI greater operational flexibility in
strengthening the market intelligence set-up and improving its management practices in procurement,
storage and quality control. The Committee expressed dissatisfaction over the market intelligence set
up of FCI, which in Committee's view, is extremely rudimentary and does not cater to data
requirements on domestic and international prices for open market sales, purchases and release of
Ramesh Kumar P