Chandigarh, June 21
Reading to the alleged rice diversion scam unearthed by the Bathinda police, the Food Corporation of India (FCI) Punjab Regional Office, has suspended movement of rice by road from its godowns to ports for export.
Confirming the action, Senior Regional Manager, FCI, Punjab, V.K. Singh, told The Tribune that he had sought approval of the head office of the corporation.
Sources in the trade say the suspension of the road movement will affect rice export, essential for the clearance of stocks which are choking FCI godowns in Punjab before the arrival of new crop. If the godowns are not emptied well in time, it will not be feasible for procurement agencies to purchase paddy in the next season, putting the state farmers to a disadvantage.
Both trade and FCI sources say it costs the corporation Rs 200 per quintal per annum to store rice. To clear the stocks speedily, the Union Government decided to give rice to the exporters at subsidised rates. Since the WTO prohibits subsidy beyond a point, the FCI gives “hidden subsidy” to the exporters. They are given rice at a rate of Rs 576 a quintal against Rs 950 per quintal sold by the FCI in the domestic market.
To ensure that the exporters fulfil their commitment, a bank guarantee is obtained from them for the difference between the rates for domestic and export markets. The bank guarantee is released only after an exporter furnishes the
relevant papers to substantiate his claim of having exported the rice purchased from the FCI.
Since the rice procured by the FCI gets broken to the extent of 25 per cent, the exporters have to upgrade the quality of rice purchased from the FCI. For this the Government allows them to retain the broken rice plus another two per cent as processing charges.
The trade sources say instead of suspending the road movement of rice, the Punjab, FCI should have taken certain precautions taken by its counterpart in Haryana. They say the road movement of rice was allowed by the corporation due to several reasons. The facilities for upgrading FCI rice at the ports are limited.
In Punjab about 60 sortex plants (used for upgrading the rice) have been installed at a cost of about Rs 1 crore each. These days these plants are running to full capacity to upgrade the rice and repack it as per the requirement of foreign buyers. Thus the state has been
earning a lot when the other industry is facing a recession. Further, the Railways are not always able to provide wagons for taking rice to the ports.
The sources say in Haryana the FCI asks for a copy of an agreement between the exporter and the rice mill in which the rice is to be upgraded so that there is no possibility of any diversion. The corporation also endorses a copy of the release order in cases where the rice purchased is worth over Rs 1 crore to the CBI. This acts as a deterrent to unscrupulous elements.
The Senior Regional Manager, Haryana FCI, Mr T.C. Gupta, has also suggested to the head office that to check whether an exporter has exported only that rice which was purchased from the FCI, each consignment should be inspected at the port before its shipment. The corporation is believed to have sent the suggestion to the Union Food Ministry for approval.
The sources say a meeting of senior officers of the Food Ministry and the Commerce Ministry is held every week to tally the figures of rice sold by the FCI and that exported to the other countries to check if any diversion of rice is taking place or not. The sources say the figures, so far, have tallied.
