From Storage to Stability: The Case for a Bigger and Smarter FCI

The wedding season is upon us again — and with it, the ritual inflation in vegetable and pulse prices. It’s a yearly phenomenon. I know it beyond debate because it bites my wallet every time.

Call it irritation or insight, but every time this happens, I feel the same way: India needs the Food Corporation of India (FCI) to play a much bigger — not smaller — role in our food economy.

Food Is Fundamental — To Everyone

Food, in India, isn’t just a private consumption item. It’s a public emotion and a political variable. It feeds not only stomachs but also narratives — of poverty, of prosperity, of electoral promises.

About 45% of Indians depend on the farm sector for livelihood; the rest depend on it for survival. That’s practically the whole nation.

So, what if the FCI stopped being just a procurement-and-distribution bureaucracy for rice and wheat — and became a true price stabilizer for the Indian food system?

The Radical Idea

Here’s my proposition.

The FCI should procure all major farm produce — cereals, pulses, oilseeds, and even perishables — at politically expedient prices (because farm procurement pricing in India is political, let’s not pretend otherwise).

It should then store the produce in an expanded storage network and sell them directly to local mandis, bazar cooperatives, retail chains, restaurants, wedding organizers (during the wedding seasons), and festival committees (during the festive seasons).

This way, the FCI becomes not a paper regulator issuing orders, but a real market participant — moderating prices through action, not instruction. It would buy when prices are falling and sell when prices are rising.

Both farmers and consumers — the twin pillars of India’s political economy — would benefit.

In short: the FCI becomes to food what the RBI is to money — a stabilizing institution.

How It Can Work

Yes, this would require massive capacity expansion — but that’s precisely the kind of public investment India needs right now.

Here’s a possible framework:-

Central FCI: Focus on national-level crops and large landholding farmers.

State Food Corporations: Focus on smaller and marginal farmers, and perishables.

FPOs (Farmer Producer Organizations): Serve as aggregators — intermediaries who can connect both systems.

Such a structure would distribute responsibility while integrating purpose — stabilizing both rural incomes and urban prices.

Challenges — And Why They Can Be Overcome

Of course, this is easier said than done. The FCI, as it exists today, is far from efficient. But none of its challenges are unsolvable.

1. Storage and Wastage: Grain rot and logistical delays are chronic.

Solution: Expand cold chains, involve private logistics players through PPP models, and use AI-based inventory monitoring.

2. Fiscal Cost: Yes, expansion will be expensive initially.

Solution: Rationalize subsidies and redirect funds from emergency price interventions, export bans, and other ad-hoc inflation measures — all of which are more costly in the long run.

3. Moral Hazard: Farmers may overproduce if procurement is guaranteed.

Solution: Implement rotating procurement baskets and limit interventions to within pre-set price bands.

4. Bureaucratic Inefficiency: The FCI has often been a dumping ground for political appointees.

Solution: Professionalize its management. Bring in domain experts — technologists, business managers, economists — in addition to civil service officers.

5. Coordination With States: Interference and friction between Centre and States are predictable.

Solution: Clearly divide roles: Centre for macro crops and export balance, States for perishables and local demand-supply stability.

These are not impossible hurdles. They are mostly administrative — and given the potential political payoff, they can certainly be overcome.

After all, which government wouldn’t want to simultaneously please both the farmer and the consumer?

The Political And Economic Case

If done right, this idea could revolutionize India’s food economy.

It would tame food inflation — the Achilles’ heel of every Indian government.

It would offer farmers predictable income without endless subsidies.

It would create new rural infrastructure and jobs.

It would make the FCI a profit-neutral, stability-oriented enterprise — a kind of “public food bank” for India.

In other words: Politically, it’s a goldmine. Economically, it’s sound. Socially, it’s stabilizing.

A Win-Win For Everyone

I’ve tried hard to find a loser in this arrangement — I can’t see one. Farmers win. Consumers win. The government wins. The political class wins.

The only loser, perhaps, would be the middlemen who thrive on chaos. And India’s democracy doesn’t owe them anything.

So yes — this is a radical idea. But it’s also a necessary one.

It’s time we let the FCI evolve from a storage agency into a Food Price Stabilization Authority — an institution that buys when farmers despair and sells when consumers bleed.

Because food is not just another market. It’s the very foundation on which this country stands.