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 [2019]

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

The economic cost of foodgrains to FCI is of strategic importance, as it influences not only the food subsidy bill but also the country’s competitiveness in international markets for foodgrains.
The economic cost of food grains to the Food Corporation of India (FCI) consists of:
- Minimum Support Price (MSP) and any bonus paid to farmers.
- Procurement incidentals, which include costs incurred during procurement like handling, storage, and administrative expenses.
- Distribution cost, which includes transportation, storage, and distribution of food grains to various regions across India.

Food Corporation of India is a statutory body setup under the Food Corporation Act 1964, in order to fulfil the following objectives of the Food Policy:
- Effective price support operations for safeguarding the interests of the farmers,
- distribution of foodgrains throughout the country for the public distribution system and
- maintaining a satisfactory level of operational and buffer stocks of foodgrains to ensure national food security.
Nodal Ministry: Ministry of Consumer Affairs, Food and Public Distribution.
The FCI purchases crops at MSP, providing financial security to farmers and making agriculture remunerative.