The Food Corporations Act was enacted on 10.12.1964. This Act is incorporated to facilitate the establishment of Food Corporations for trading food grains and such other food products related to it. This Act established Food Corporation of India (FCI) to fulfill the objectives of food policy. Since inception of this Corporation, it has handled abundance and insufficiency. FCI is established to manage the tasks in pursuance to food security in India. The main objectives of FCI are to safeguard the interests of the farmers through effective price support operations, distribution of food grains and other food substances all over the Country and to maintain satisfactory level of operations by having ample reserves of food grains for National food security.
FCI is one of the largest corporations in India having large supply chain. It purchases wheat, rice, etc, from farmers at the government rate called minimum support price fixed by Minister of Food and Ministry of Agriculture. The stocks are transported throughout India and distributed to the State Governments and other legal bodies for further distribution under the Public Distribution System for the consumption of ration card holders. This Act gets its last amendment in the year 2001. FCI is managed by Board of Directors headed by a Chairman representing Ministry of Food, Ministry of Finance and Ministry of Co-operation and several other Directors performing their duties that are delegated to them as per the Act and receives salaries and allowances as prescribed by the Central Government.
The Central Government can disqualify any of the Director or members of office if he adjudicated insolvent, if he is of unsound mind, if he is convicted for any offence involving moral turpitude, if he is removed or discharged from office during his service of the Government, etc. The Chairman and Managing Directors are exceptional to some of these disqualification criteria. The meetings were held at any place and time as prescribed by the Act and it is presided with the chairman. In case of his absence any of the Directors with his permission shall hold the meeting. Any questions arise in the meeting shall be solved through voting. In case of equal votes, the presiding officer shall get second chance to vote.
The Corporation shall have the primary duty to undertake purchase, sale, distribution, movement transport, etc of food grains and other food products. The Corporation with the approval of the Central Government shall promote the production of food grains and other food substances. Its duty extends to setup several undertakings such as rice mills, flour mills, etc for the process of food grains and other food stuffs. It discharges such other function as may be prescribed on the course of requirement conferred under this Act.
This Corporation shall constitute any number of committees that deems necessary to perform such functions for which it is constituted under the Act. The Food Corporation of India for performing its function shall take advances from a scheduled bank, other banks or financial institutions approved by the Central Government against stocks of food grains and other food substances. It issues and sells bonds and debentures at the rate prescribed by the Central Government.
The Corporation shall enter into the agreement to purchase harvested food grains at the rate prescribed by the Central Government and the amount shall be paid by the Scheduled bank as and when the agreement gets its enforcement. The Corporation shall have its own funds which are used for its administrative expenses for carrying out the purpose of this Act.
The Corporation shall invest in securities of Central Government and State Government as may be prescribed. Every years profit shall be first allocated for the reserves of bad and doubtful debts, depreciation in assets etc, and such other profit shall be paid to the Food Corporation of India and State Food Corporation. It shall maintain proper books of accounts audited by controller and Auditor General of India.
FCI has played a significant role in India’s success in transforming crisis oriented food security into a stable security system. In order to restructure FCI the Central Government has planned to separate three entities of FCI in the year 2014. They are procurement, Storage and Distribution to reduce food inflation and effective administration.
by C.Srivenkatesh Prabhu