India’s worst famines happened after independence too, not just under colonial rule. The 1943 Bengal famine was still a fresh memory when repeated food shortages in the 1950s and 60s forced the government to build a permanent institution to manage the country’s grain. That institution, the Food Corporation of India, still runs the world’s largest food-management operation today.
MCQ QuestionsINDECO0134
482+ LMT
Foodgrain storage capacity with FCI, Nov 2025
India’s central food-security agency, procuring, storing, and moving grain since 1965.
Founded
1965
Under the Food Corporations Act, 1964, after repeated post-independence food shortages.
Mandate
3 statutory goals
MSP for farmers, affordable PDS grain, and national buffer stock.
Godowns
2,500+
FCI storage depots operational across India, as of December 2025.
Reform
2015
Shanta Kumar Committee recommended restructuring FCI’s role.
Indian Economymcqquestion.com
✊ Must Know
1. Founding and Structure
- FoundedThe Food Corporation of India (FCI) was set up on 14 January 1965. Parliament created it under the Food Corporations Act, 1964.
- CauseRepeated food shortages in the 1950s and 60s drove the decision. The Foodgrains Policy Committee of 1957 first recommended a dedicated procurement and storage body.
- StatusFCI is a Public Sector Undertaking under the Ministry of Consumer Affairs, Food and Public Distribution. It was first headquartered in Chennai, then moved to New Delhi.
2. Mandate and Operations
- MandateThe Act gives FCI three statutory objectives: giving farmers remunerative prices through effective price support, supplying grain for the Public Distribution System (PDS) at reasonable rates, and maintaining buffer and operational stocks for national food security.
- ProcurementFCI procures wheat, rice, and coarse grains directly from farmers. It buys at the government’s Minimum Support Price (MSP), not at open-market rates.
- StructureFCI operates through five regional offices. Each is led by a General Manager, under a Chairman and CEO at the top.
📘 Good to Know
1. NFSA and the Shanta Kumar Review
- NFSAFCI is the key implementing agency behind the National Food Security Act, 2013. It supplies the subsidised grain that states distribute to NFSA beneficiaries through the PDS.
- CommitteeIn August 2014, the government set up a High-Level Committee to review FCI’s role. Former Himachal Pradesh Chief Minister Shanta Kumar chaired it. It submitted its report to Prime Minister Modi in January 2015.
- RecommendationsThe Shanta Kumar Committee recommended letting private players procure and store grain, ending state-level MSP bonuses, and shifting toward direct cash transfers of food subsidies. It also recommended narrowing FCI’s own procurement role, focusing on states where private procurement is weak.
2. Economic Cost and Current Capacity
- Economic costFCI’s economic cost of foodgrain is more than just the MSP it pays farmers. It equals MSP plus any bonus, plus procurement incidentals (mandi tax, labour, gunny bags), plus distribution cost (freight, storage, handling, transit losses).
- CapacityAs of December 2025, more than 2,500 FCI godowns are operational across India. Total foodgrain storage capacity with FCI stood at over 482 lakh metric tonnes as of November 2025. (Source: All India Radio News)
- See alsoSee IndEco0029 — Support Pricing System and MSP Mechanics and IndEco0031 — Buffer Stock and Food Grain Management for FCI’s procurement and stock-holding mechanics in detail.
Test Yourself
🏆 Great to Know
1. From Scarcity to Surplus Debate
- ReversalFCI’s founding logic was scarcity: build enough buffer stock that famine becomes structurally harder to repeat. Six decades later, the debate has flipped — critics now argue FCI holds too much stock, at high fiscal cost, rather than too little.
2. The Most Contested Reform
- Trade-offThe Shanta Kumar Committee’s most contested recommendation was cutting NFSA coverage from 67% of the population to 40%. It paired this with raising each beneficiary’s grain entitlement from 5 kg to 7 kg a month, aiming for fewer, better-served beneficiaries.
3. A Genuine Policy Tension
- TensionFCI sits at the center of a real tension in Indian agriculture. Its MSP-based procurement guarantees farmers a price floor, credited with grain self-sufficiency since the Green Revolution. But that same guarantee also reduces farmers’ incentive to diversify away from wheat and rice, the two crops FCI procures most heavily.
📝 Previous Year Questions
1. UPSC CSP 2019 — FCI’s Economic Cost Formula
Asked as: “The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus” (UPSC CSP 2019, GS Paper I). The correct answer is (c) procurement incidentals and distribution cost. View this question →
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