NEW DELHI: The mismanagement of grain storage has led to damage of 1.06 lakh tonnes of wheat in Punjab and Haryana alone worth Rs 122 crore, a Comptroller and Auditor General report has said.

The CAG report on Food Corporation of India’s (FCI) functioning, tabled in Parliament on Tuesday, said as of March 2012, more than 103 lakh tonnes of wheat stocked in the central pool was lying in the custody of Punjab and Haryana which was procured between 2007-08 and 2011-12 but was not released for distribution despite a first-in first-out (FIFO) policy.

The government mandates the FIFO policy to ensure that grains are supplied to consumers before they deteriorate in storage, especially considering the large quantities that are stored in the open.

Despite damage owing to overstocking and lack of storage space, procurement increased from 343 lakh tonnes to 634 lakh tonnes between 2006-07 and 2011-12. However, there was not much improvement in storage space or movement of food grains from procuring states to consuming states during this period.

Procurement of food grains started increasing substantially from 2008-09 when the stock of food grains in the central pool increased from 548 lakh tonnes to 824 lakh tonnes as on June 1, 2012.

However, FCI-owned storage capacity remained more or less static, ranging between 151 lakh tonnes and 156 lakh tonnes during the years 2008-09 to 2011-12. Hiring of capacity by FCI increased from 101 lakh tonnes to 180 lakh tonnes during the period. Further, due to constraints in storage capacity, FCI could not take over stock of wheat procured by states.

“This led to increase in payment of carry over charges to state governments from Rs 175 crore in 2006-07 to Rs 1,635 crore in 2011-12 for holding of food grains beyond the prescribed time, other than facing issues such as damages of grains,” the report said.

The report also criticized the government for its failure to define a policy on buffer stock. “The minimum buffer norms prescribed by the Centre were ambiguous as it did not clearly delineate individual elements of food security – e.g. emergency, price stabilization, food security reserve, targeted public distribution system and other welfare schemes within the minimum buffer stock,” CAG said.

The norms also did not specify the maximum and manageable level of stock to be maintained in the central pool and the components therein, it added.

