Co-operation, Food and Consumer Protection Department

Policy Note – 2006 – 2007

Food and Consumer Protection

Demand No. 13

Chapter – I

INTRODUCTION

The Department of Food and Consumer Protection is entrusted with the task of providing food security to the people  through the public distribution system and promoting consumer welfare in the State . The public distribution system ensures food security to the people, especially the poor and the downtrodden by supplying rice, wheat and certain other essential commodities at subsidized prices through a network of fair price shops. Under the public distribution system, each family is provided a family card which is attached to the nearest fair price shop. The cardholder is entitled to purchase his requirement of essential commodities from this shop. The Government fixes the scale of supply of essential commodities to a family depending on the number of persons in the family and on whether it resides in a urban or rural area. The objective of the Government is to ensure that each family is supplied the correct quantity of the essential commodities to which it is entitled at prices fixed by the Government. The commodities supplied should also be of acceptable quality. The public distribution system should be easily accessible, quality conscious and stocked with adequate quantities of the commodities in order to achieve these objectives.

The other thrust area in which the Department has been active over the last few years is the promotion of consumer welfare. The Government’s objective is to create consumer awareness among the public and to develop the capabilities of the agencies established for the purpose of redressal of the grievances of consumers. 

Chapter – II

PUBLIC DISTRIBUTION SYSTEM

The public distribution system in Tamil Nadu is unique since it is based on the choice of the people and covers all families. The State  Government has adopted the universal public distribution system as against the targeted public distribution system advocated by the Government of India. Under the targeted public distribution system, the families living Below the Poverty Line (BPL) are supplied essential commodities at much lower prices than the families Above the Poverty Line (APL ). But under the universal public distribution system followed by the Government of Tamil Nadu, no such distinction is made among the families and all families are supplied essential commodities at the same rates.

Essential Commodities supplied under the Public distribution system

The essential commodities that are supplied under the public distribution system are rice, wheat, sugar and kerosene. The details of the commodities supplied under the Public distribution system, their prices and the scale of supply are given in the table below:-

Ensuring Accessibility to the public distribution system

Accessibility to the public distribution system is dependent on the possession of a family card and the distance to the fair price shop. This State  has evolved a system of issuing family cards on option basis whereby all families, which prefer to draw rice under public distribution system have been issued with green colour cards and families, which want only sugar or do not want any commodity, have been issued with white colour cards. White colour cardholders with sugar option are eligible for an additional quantity of 3 Kgs of sugar per month .

 The details of family cards in circulation in Tamil Nadu as on 30.04.2006 are as follows:

The issue of family cards to eligible families is a continuous process and Government have issued necessary instructions to the Commissioner of Civil Supplies and Consumer Protection to issue cards to the families after

proper verification without any delay.  At the same time, bogus cards are also being eliminated to ensure that unscrupulous elements do not access the system and divert the commodities to the open market.

 A pilot project has been taken up whereby in each of the Assembly Constituencies, a village shop and a shop in an urban area have been chosen for 100% verification of cards to detect the percentage of bogus cards in the State . The results of the verification will be analysed and if necessary steps will be taken to check the genuineness of all the cards in circulation so that bogus cards can be deleted.

The other unique feature of the public distribution system in Tamil Nadu is that the fair price shops are run only by the Cooperatives, the Tamil Nadu Civil supplies Corporation and the self-help groups. No private traders are allowed to run fair price shops.

 The details of fair price shops functioning in Tamil Nadu as on 30.6.2006 are as follows:

The aim of Government is to have at least one fair price shop in each Revenue Village. The District Collectors have been empowered to open fair price shops as per the guidelines prescribed.  The Government have issued orders to the effect that each shop in urban areas should be attached with a maximum of 1000 cards and minimum of 800 cards and in rural areas the maximum card strength should be  800  and the minimum should be  500.  The fair price shops are located in such a way that no card holder is  required to walk more than 2 kms for getting essential commodities.   

 Collectors have been instructed to open part-time fair price shops as per the guidelines to benefit the public. It has been found in a study that the reliability and accessibility of the public distribution system in Tamil Nadu is of a high order.

However, in order to improve the quality of service to the public, norms for opening part time shops will be relaxed and even in habitations with 150 families, fair price shops will be opened if the existing fair price shop is 11/2 km away from the habitation.

Ensuring availability of essential commodities in the Public distribution system

The Tamil Nadu Civil Supplies Corporation (TNCSC) acts as the wholesaler in respect of rice and wheat. It takes delivery of these commodities from the Food Corporation of India and makes them available at the operational godowns from where the Cooperatives take delivery and move them to the fair price shops. The Tamil Nadu Civil Supplies Corporation procures rice and wheat from the Food Corporation of India and sugar from the sugar mills as per the allotments made by the Government of India. The Cooperative Societies take delivery of Kerosene from the storage points of the wholesale dealers and transport them in barrels to the fair price shops. In some cases the wholesale dealers transport the kerosene in tankers and fill up the barrels kept in the fair price shops.

The Cooperatives play a prominent role in the distribution of essential commodities through an extensive network of 26429 shops run by 5060 Cooperative Societies comprising of 86 lead Societies, 4540 link Societies and 434 self lifting Societies. The Cooperative Banks provide the necessary credit to the Societies for taking delivery of commodities from the Tamil Nadu Civil Supplies Corporation. In case the lead Society is financially weak, the Tamil Nadu Civil Supplies Corporation permits delivery on credit basis in order to ensure that the essential commodities are moved to the fair price shops in time.

The essential commodities required for each shop is allotted by the officials of the Department of Civil Supplies and these commodities are moved accordingly.  The movement of the commodities to the fair price shops and the availability of sufficient stock in the shops is supervised by the District Collectors, officials of the Civil Supplies Department  and Revenue Department.

CHAPTER - III

SUPPLY OF RICE UNDER THE PUBLIC DISTRIBUTION SYSTEM AND THE INTRODUCTION OF RICE AT RS.2 PER  KG  SCHEME

Rice is the staple food of the people of Tamil Nadu. Therefore the Government of Tamil Nadu attaches considerable importance to distribution of quality rice at a reasonable price through the fair price shops. This is evident from the fact that the first order of the Hon’ble Chief Minister soon after assuming office was to lower the issue price of rice in the public distribution system to Rs.2/- per Kg with effect from 3.06.2006. As per the announcement, the Hon’ble Chief Minister launched  the scheme on 3.6.2006 in a fair price shop in ‘Thiru. Vi. Ka. Kudil’ in Thousand Lights Assembly Constituency in Chennai city. This price is much lower than  the price at which the Government of India supplies rice to the poorest of the poor families under the Antyodaya Anna Yojana scheme (AAY). Tamil Nadu is the State , which supplies rice at the lowest price. This will go a long way in eliminating hunger in Tamil Nadu by enabling highest levels of affordability and utilisation by the poor.

As on 30.4.2006, 1,78,00,240 eligible family cardholders are drawing rice under the public distribution system. This includes 18,64,600 AAY family cardholders. The monthly requirement of rice under public distribution system and for the scheme of Antyodaya Anna Yojana is about 3 lakh MTs.

Supply of rice under Antyodaya Anna Yojana

Antyodaya Anna Yojana (AAY) is one of the important schemes of the Government of India. The scheme has been implemented in this State  from 01.11.2001 in urban areas and from 01.12.2001 in rural areas.  The beneficiaries under the

scheme have been identified and their family cards have been stamped as Antyodaya Anna Yojana cards. 

Each Antyodaya Anna Yojana  beneficiary is supplied with 35 kg of rice per month. Under the Rs.2 per kg scheme implemented by the Government from 03.06.2006, all Antyodaya Anna Yojana    beneficiaries are also supplied rice at Rs.2 per kg.

There have been complaints regarding the selection of beneficiaries under the Antyodaya Anna Yojana scheme. Since only the poorest of the poor are eligible to draw rice under the scheme, it is proposed to delete the ineligible families enrolled under the scheme as already announced by the Hon’ble Chief Minister.

Procurement of Rice

Under the targeted public distribution system, the Government of India issues rice at Rs. 830/- per quintal for the APL families and at Rs 565/- per quintal for the BPL families. Besides, for the families covered under the Antyodaya Anna Yojana scheme, the allotment is made at Rs 300/- per quintal.  

The Government of India allots 1.70 lakh Mts of rice for BPL category and Antyodaya Anna Yojana   scheme per month. A further allotment of 3 lakh MTs. of rice is made for APL families.

The requirement of rice for distribution in the public distribution system is expected to be higher during 2006-2007.  In order to  fulfil this additional requirement, necessary arrangements will be made to obtain rice from the central pool.

At present, sufficient stock of rice is available for distribution  to those who have opted for rice in the public distribution system.

The State Government has requested the Government of India and Food Corporation of India to improve the quality of rice supplied and tighten up the Fair Average Quality standards.

Procurement of Paddy

The Tamilnadu Civil Supplies Corporation  procures paddy from the farmers at prices fixed by the Government . This procurement is done on behalf of the Food Cooperation of India and therefore it is called the decentralised procurement system. The State  Government has signed a Memorandum of Understanding with the Government of India whereby the Tamilnadu Civil Supplies Corporation acts as the agent of Food Corporation of India.  This scheme of decentralized procurement has been in force from the Kuruvai crop season in 2002. The paddy so procured is hulled and the custom milled rice is also allotted for supply under the public distribution system. During the samba season in 2005 – 2006, Tamil Nadu Civil Supplies Corporation  has procured 12,54,104 MTs of paddy upto 15.7.2006.      

Food Subsidy

The  price of rice supplied in the public distribution system  in Tamil Nadu is much  lower than the issue price of rice fixed by the Government of India. Therefore, the State Government sanctions subsidy to the Tamil Nadu Civil Supplies

Corporation. The details of provisions made towards subsidy from 2003- 04 are given below:-

      (Rupees in Crores)

As the issue price of the rice distributed under public distribution system has been reduced and  the quantity of rice distributed has increased, a provision of Rs. 1950 crores has been made in the Budget Estimate for 2006 – 2007 to meet the increased  commitment towards food subsidy.

CHAPTER-IV

SUPPLY OF WHEAT, SUGAR AND KEROSENE UNDER THE PUBLIC DISTRIBUTION SYSTEM

Apart from rice, wheat, sugar and kerosene are supplied to the family cardholders under the public distribution system. 

Wheat

A monthly average requirement of about 6000 MTs of wheat is required for supply to card holders under the public distribution system. However the Government of India have reduced the allotment in June, 2006 to 3783 MTs. Since this allotment is not adequate to meet the requirements, the matter has been taken up with the Government of India and a request has been made for additional allotment of wheat. The retail price of wheat under Public distribution system has been fixed at Rs.7.50 per Kg. 

Sugar

The Government of India allots levy sugar on a monthly basis specifying the quantities to be released by each sugar mill in Tamil Nadu and Pondicherry.  Under the public distribution system, the maximum quantity supplied is  2 kgs.  of  sugar per family. The actual entitlement is calculated at  500 gms per individual. Sugar is sold at Rs.13.50 per kg in the public distribution system.

Families who have opted to buy sugar in lieu of rice, are provided an additional quantity of 3 Kgs of sugar per month.  The number of families who have opted for sugar as on 30.04.2006 was 10,12,060. 

 As per the above scale of supply and the number of cards in circulation, the requirement of sugar at present is 36,345 Tonnes per month.  The average  off-take of sugar during 2005 was 26,377 MTs.  per month.

The Government of India made monthly allotments of levy sugar at the rate of 10830 tonnes upto July 2005.  Thereafter there was a decline in the monthly allotment and in December 2005, an allotment of 5753.5 MTs  was made only for the families below the poverty line.   However, the State  Government have decided to continue the supply of sugar to all cardholders. The requirement of sugar over and above levy quota is met by Tamil Nadu Civil Supplies Corporation through open market purchases from  Tamilnadu  Cooperative Sugar Federation..  The Government of India’s reduction in allotment of levy sugar and increased consumption of sugar in the public distribution have led to an increase in the State’s subsidy burden.

KEROSENE

The total requirement of kerosene for supply under public distribution system is as follows:

The Government of India have gradually cut down the monthly allotment of Kerosene to the State  from 77,108 KL in the year 2000 to 59,856 K.L. on the basis of the number of liquified petroleum gas connections released in the State.  This is not adequate to meet the requirements and therefore the kerosene has not been supplied to 39.39 lakh families who were issued with new family cards in 2004.  Hence the State  Government have requested the Government of India to enhance the allotment to the State  from 59,856 KL to 76,000 KL per month. 

The retail selling price of kerosene under the public distribution system has been  fixed ranging from Rs.8.40 to Rs.9.00 per litre depending upon the distance from the   supply terminals of oil companies and kerosene wholesale points.  Tamil Nadu Government incurs a  subsidy of 60 paise per litre and the subsidy for supply of kerosene under public distribution system works out to Rs.3.44 crores per month.

Kerosene bunks

A scheme for the establishment of kerosene bunks similar to petrol bunks is being implemented in the State in order to ensure proper supply of kerosene to the card holders.  A kerosene bunk serves a maximum of 12,000 family cards within a radius of 2 kms.  The installation of a bunk costs about Rs.4.50 Lakhs. As on 30.04.2006 there are 309 kerosene bunks functioning in the State. .  Supply of kerosene to card holders is being  done on a staggered basis in all kerosene bunks  and fair price shops with more than  2000 ration cards for the benefit of the public. As a result, there is no crowding at kerosene bunks and  fair price shops.  

In order to improve the quality of service to the public  36 kerosene bunks run by Tamil Nadu Civil Supplies Corporation will be computerized in the current year.

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