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Lower grain procurement hits Indian Railway’s freight revenue

15 Nov

Foodgrain transportation by the Indian Railways declined almost a fifth in April-September this year, hitting the transporter’s freight revenue hard, and this has mostly to do with some of the large grain-deficit states reducing their dependence on other states and augmenting local procurement report Sandip Das and Bilal Abdi in New Delhi.

Food Corporation of India (FCI), which is largely responsible for nationwide procurement of grains, has had to collect much lower amounts of grain in recent months as West Bengal, Uttar Pradesh and Bihar, among others, have increased sourcing of rice and wheat from within the respective states. These states, with a substantial poor population, lack an efficient mechanism for grain procurement.

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This makes them reliant on the ‘central pool’ (read FCI) created by surplus states like Punjab, Haryana, Madhya Pradesh, Chhattisgarh and Odisha for running their targeted public distribution system (TPDS).

In the first half of the current fiscal, FCI transported only 18.7 million tonnes of foodgrains using the railways’ network, down 20% from the corresponding period in the previous year. The railways’ overall foodgrain loading also correspondingly declined — the transporter carried 22.14 million tonnes of grain in the first half of the fiscal, down 19.5% from the year-ago period. Grains are the third major freight revenue item for the railways after coal and cement.

According to food ministry sources, the current year’s grain transportation through rail network would be substantially lower than 46.7 million tonnes transported last fiscal. In the recently concluded rabi marketing season (2015-16), government agencies in Uttar Pradesh purchased 22.67 lakh tonnes of wheat from the farmers mainly for distribution through TPDS. This reduced the volume of transportation of wheat from states like Punjab and Haryana to Uttar Pradesh. Similarly, West Bengal had lifted 20.32 lakh tonnes equivalent of rice from the farmers during 2014-15 kharif marketing season. Official sources told FE that West Bengal did not ask for rice from the central pool during the year.

“The higher the volume of localised procurement, more farmers are covered under the minimum support price (MSP) regime. The lower transportation through railways results in higher savings on part of FCI,” an official said.In the first half of the current fiscal, FCI transported only 18.7 million tonnes of foodgrains using the railways’ network, down 20% from the corresponding period in the previous year. The railways’ overall foodgrain loading also correspondingly declined — the transporter carried 22.14 million tonnes of grain in the first half of the fiscal, down 19.5% from the year-ago period. Grains are the third major freight revenue item for the railways after coal and cement.

According to food ministry sources, the current year’s grain transportation through rail network would be substantially lower than 46.7 million tonnes transported last fiscal. In the recently concluded rabi marketing season (2015-16), government agencies in Uttar Pradesh purchased 22.67 lakh tonnes of wheat from the farmers mainly for distribution through TPDS. This reduced the volume of transportation of wheat from states like Punjab and Haryana to Uttar Pradesh. Similarly, West Bengal had lifted 20.32 lakh tonnes equivalent of rice from the farmers during 2014-15 kharif marketing season. Official sources told FE that West Bengal did not ask for rice from the central pool during the year.

“The higher the volume of localised procurement, more farmers are covered under the minimum support price (MSP) regime. The lower transportation through railways results in higher savings on part of FCI,” an official said.

http://www.financialexpress.com/article/economy/lower-grain-procurement-hits-indian-railways-freight-revenue/165416/

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Posted by on November 15, 2015 in Uncategorized

 

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