Govt to release 5 MT of foodgrains, 3 MT wheat

Faced with severe storage crunch, the government today decided to allocate additional 5 million tonnes of foodgrains to poor families and allow sale of 3 million tonnes of wheat to bulk users at cheap rates which will cost the exchequer a total of Rs 10,000 crore.

"The Empowered Group of Ministers (EGoM) has agreed to allocation of additional 5 million tonnes of foodgrains to BPL families. It has also agreed to allow 3 million tonnes of wheat through OMSS (Open Market Sale Scheme)," Food Minister K V Thomas told reporters here.

For APL (above poverty line) families, Thomas said the government had allocated 2 million tonnes of foodgrains last fiscal, but only about 50 per cent were lifted by states. Hence, the EGoM allocated the remaining one million tonnes for this year.

The decision comes in the backdrop of government facing a storage crunch. Foodgrain stocks in godowns are piling up and hold a record 82 million tonnes against a capacity of 63 million tonnes.

According to sources, the allocation of five million tonnes of foodgrains to BPL (below poverty line) families would cost exchequer Rs 8,500 crore, while the sale of three million tonnes through OMSS would have a subsidy burden of Rs 1,900 crore.

Under public distribution system, BPL families get wheat at Rs 4.15 per kg and rice at Rs 5.65 per kg. The rate for APL is Rs 6.10 for wheat and Rs 8.30 for rice.

The EGoM fixed the wheat price in OMSS at Rs 1,170 per quintal against the current support price of Rs 1285 per quintal. The entire freight cost would be borne by the government, sources said.

India harvested a record rice and wheat production in the 2011-12 crop year (July-June) which led to bumper procurement and record stocks in government godowns.