ECONOMICS PROJECT: STUDY OF FOOD CORPORATION OF INDIA (FCI)
Name: Gayathri Nair
Class: XII D
School: Trinity Lyceum
1. Introduction to Food Corporation of India (FCI)
The Food Corporation of India (FCI) was established in 1965 under the Food Corporations
Act to ensure food security in India. It plays a key role in the procurement, storage, and
distribution of food grains, primarily rice and wheat, through a system of Minimum Support
Price (MSP). The FCI’s primary function is to maintain food reserves and distribute food
grains through the Public Distribution System (PDS), which aims to make food accessible
to the economically disadvantaged sections of society.
FCI operates with a pan-India presence, managing an extensive network of warehouses,
godowns, and distribution channels. It is a crucial entity for maintaining national food
security and ensuring stable prices for essential commodities.
2. Relevance of FCI to the Indian Economy
Ensuring Food Security: FCI’s procurement and distribution ensures a stable food supply
and prevents hunger and malnutrition.
Support to Farmers: By procuring crops at MSP, FCI guarantees farmers a minimum
income.
Price Stability: Buffer stocks and regular releases into the market help maintain price
stability.
Employment Generation: FCI provides both direct and indirect employment in
procurement, logistics, and warehousing.
Contribution to Welfare Schemes: FCI supports government programs like the National
Food Security Act (NFSA).
3. Growth Trend Analysis (2014–2024)
a) Procurement and Distribution Trends
FCI’s procurement volumes of wheat and rice have steadily increased due to higher yields
and improved MSP outreach:
Wheat Procurement: Increased from 240 lakh tonnes (2014) to 360 lakh tonnes (2024).
Rice Procurement: Increased from 350 lakh tonnes (2014) to 500 lakh tonnes (2024).
b) Financial Performance and Budget Allocation
Government allocations have grown from ₹92,000 crore in 2014 to a projected ₹1,58,000
crore in 2024.
Subsidies have expanded with growing PDS demands, putting pressure on FCI’s financial
management.
c) Technological Advancements
2016: Online Procurement System launched.
2018: Depot Online System (DOS) implementation.
2020: Digitization of Public Distribution System (PDS).
2022: Warehouse automation.
2024: Adoption of AI tools and DBT improvements.
d) Challenges
Inadequate storage during bumper harvests leading to wastage.
Leakages and inefficiencies in food grain distribution.
Rising operational costs and financial deficits.
4. Future Prospects (2024–2030)
Modernized Procurement Systems: Improved digital integration and farmer outreach.
Enhanced Storage Capacity: Development of silos and modern godowns.
Food Processing Integration: Value addition and post-harvest loss reduction.
PDS Reforms: Expansion of DBT and improved beneficiary targeting.
Sustainability Measures: Use of renewable energy and green logistics.
5. Data Interpretation and Charts
1. FCI Procurement Volume Trends (2014–2024)
This line chart shows the yearly procurement of wheat and rice by the Food Corporation of
India from 2014 to 2024.
Rice procurement has consistently remained higher than wheat, reflecting India’s larger
production and consumption of rice.
There is a steady increase in both crops, especially after 2019, due to expanded MSP
coverage and improved farmer participation.
In 2024, rice procurement reached approximately 500 lakh tonnes, while wheat reached
360 lakh tonnes, indicating strong procurement efforts by FCI.
2. Government Budget Allocation to FCI (2014–2024)
This bar chart illustrates the amount of government funding allocated to FCI for food
procurement, storage, and distribution.
The budget has increased from around ₹92,000 crore in 2014 to a projected ₹1,58,000
crore in 2024, demonstrating the rising cost of maintaining national food security.
The steady growth reflects the government’s continued emphasis on subsidies, welfare
schemes, and food distribution under the Public Distribution System (PDS).
3. Technological Adoption Timeline in FCI (2016–2024)
This horizontal timeline highlights key milestones in FCI’s digital and technological
transformation:
2016: Launch of online procurement systems for better transparency.
2018: Introduction of the Depot Online System (DOS) to monitor stock in real-time.
2020: Widespread digitization of the PDS system across states.
2022: Automation in warehouse operations to reduce manual errors and improve
efficiency.
2024: Integration of AI-based monitoring and expansion of Direct Benefit Transfer (DBT)
programs to ensure targeted subsidies.
1. Bar Chart: Total Food grain Procurement by FCI (2014–2024)
Explanation:
This bar chart presents the annual procurement volumes of rice and wheat by the Food
Corporation of India (FCI) over a ten-year period, from 2014 to 2024. The chart shows a
steady increase in the total procurement due to the expansion of the Minimum Support
Price (MSP) system, improved agricultural yields, and increased government focus on food
security.
In 2014, the combined procurement was around 590 lakh tones (240 lakh tonnes wheat
and 350 lakh tonnes rice).
By 2024, it rose to approximately 860 lakh tonnes (360 lakh tonnes wheat and 500 lakh
tonnes rice).
This upward trend reflects FCI’s growing role in supporting farmers, managing buffer
stocks, and ensuring national food security. The steady rise also correlates with increased
budget allocations and policy reforms aimed at strengthening procurement systems.
2. Pie Chart: Percentage Share of Rice and Wheat in FCI Procurement (2024)
Explanation:
This pie chart illustrates the proportion of rice and wheat in FCI’s total procurement for the
year 2024. According to procurement data:
Rice accounts for approximately 58% of total procurement (500 out of 860 lakh tonnes).
Wheat makes up the remaining 42% (360 out of 860 lakh tonnes).
This distribution shows rice remains the dominant foodgrain in India’s public distribution
and procurement system due to higher cultivation, consumption, and regional
preferences—especially in eastern and southern states. The data also helps understand
which grain requires more storage infrastructure and subsidy support under FCI’s
operations.
6. Conclusion
The Food Corporation of India plays a pivotal role in ensuring food security, supporting
farmers, and stabilizing market prices. Its operations have expanded significantly in the last
decade, backed by rising procurement volumes, enhanced budget allocations, and
technological improvements. Despite challenges in storage and financial sustainability,
FCI’s roadmap for modernization, efficiency, and transparency ensures its continuing
relevance in India’s economic and agricultural landscape.
7. References
Ministry of Consumer Affairs, Food & Public Distribution
Food Corporation of India official reports
Government of India Budget Documents (2014–2024)
Press Information Bureau (PIB) Releases
Economic Survey of India
News articles from The Hindu, Times of India, Financial Express
