Shanta Kumar Committee

Indian Economy glossary

Also called: High Level Committee on restructuring FCI · Topic: Agricultural Marketing, MSP, Buffer Stocks and PDS · NCERT: Beyond NCERT

Meaning

The Shanta Kumar Committee was the High Level Committee on restructuring FCI (Food Corporation of India). It was set up under Shanta Kumar and reported in 2015. Using NSSO survey data, it found that only about 6% of farmers sell their wheat or paddy to a procurement agency at MSP. Procurement here means the government buying grain from farmers. The committee also estimated PDS leakage at about 46.7% in 2011-12. Leakage is grain that goes to the open market or to people not entitled to it, instead of reaching ration-card holders.

Its main recommendations were:

  • Hand procurement over to States that already buy grain well, such as Punjab and Haryana.
  • Move FCI into eastern States, where small farmers make distress sales (selling in a hurry, below MSP, because they need cash). It named eastern UP, Bihar, West Bengal and Assam.
  • Cut NFSA coverage to about 40% of the population.
  • Shift towards cash transfers in place of physical grain.
  • Build a storage and credit system based on negotiable warehouse receipts (NWRs). An NWR lets a farmer store grain and borrow against it.

Example

A wheat farmer in Punjab can sell the whole crop at MSP because government buying centres are close by. A small paddy farmer in Bihar often finds no buying centre nearby and sells to a trader below MSP. The committee wanted FCI to reach the Bihar farmer.

Don't confuse with

  • National Commission on Farmers (Swaminathan, 2004-06): it dealt with farmers' welfare as a whole. It is the source of the demand that MSP be at least 50% above C2 cost. The Shanta Kumar Committee dealt with FCI, procurement and the PDS.

Recent developments

  • 2015, a finding the page leaves out: The committee found that for five years FCI had held, on average, more than double the buffer norm (the minimum grain stock the government must keep). It blamed the lack of a proactive liquidation policy, meaning no plan to sell extra stock in good time. It asked for sales that start automatically whenever stocks go above the norm, through the Open Market Sale Scheme (OMSS), where FCI auctions grain to private buyers, and through exports. This matters because surplus grain costs the government money to store every year.
  • 2023, CAG audit: The CAG found that average FCI stocks were almost two times the level FCI was required to hold. So the excess the committee flagged in 2015 was still there almost ten years later.
  • 1 July 2025: Central-pool rice stood at 377.83 lakh tonnes against a buffer norm of 135.40 lakh tonnes, about 2.8 times the requirement. The surplus has grown even larger than the one the committee saw.
  • 6 Nov 2026: The Centre doubled the OMSS (D) (Domestic) rice sale target for 2026-27 from 25 LMT to 50 LMT. It did this mid-year, after 25 LMT had already been sold by 31 October. Selling is still decided one year at a time, in response to events. The committee's idea of automatic, rule-based sales is still not policy.

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