Department of Food and FCI Sign MoU to Boost Efficiency in Food Grain Procurement and Distribution

The Department of Food and Public Distribution (DFPD), Government of India and the Food Corporation of India (FCI) have signed a Memorandum of Understanding (MoU) for FY 2024-25 here today, to enhance the efficiency and accountability of food grain procurement and distribution.

The MoU outlines specific performance benchmarks (including performance benchmarking of FCI Depots) and accountability measures aimed at optimizing the use of public funds in managing food security operations. Performance benchmarking of FCI Depots contains depot efficiency parameters like capacity utilization, operational losses, security measures, modernization and automation of processes at depots etc.

The MoU is an initiative which  reflects Centre Government’s commitment to refine the Public Distribution System (PDS) and to ensure that food subsidy funds are managed with the highest level of efficiency by way of overall enhancement in the performance of FCI operations and its depots.

FCI was set up in 1965 under an Act of Parliament called the Food Corporations Act, 1964 (Act No. 37 of 1964) with the primary duty to undertake the purchase, storage, movement/ transport, distribution and sale of foodgrains.

The Corporation serves a public service mandate on behalf of the Department of Food and Public Distribution (DFPD). It does not have any income source and its public service mandate is financed completely through the food subsidy released by Government of India (GOI).

It is appropriate that such large public expenditure is to be evaluated for their cost-effectiveness and value for money. This entails benchmarking of performance on critical operational parameters and establishing institutional accountability.