Which of the following statements is/are correct regarding the Food Corporation of India (FCI) and buffer stocks?
1. The Economic Cost of food grains to the FCI includes only the Minimum Support Price (MSP) paid to farmers.
2. The Shanta Kumar Committee recommended restructuring the FCI to reduce physical grain procurement and encourage direct cash transfers.

Question

Which of the following statements is/are correct regarding the Food Corporation of India (FCI) and buffer stocks? 
1. The Economic Cost of food grains to the FCI includes only the Minimum Support Price (MSP) paid to farmers.
2. The Shanta Kumar Committee recommended restructuring the FCI to reduce physical grain procurement and encourage direct cash transfers.

Accepted Answer

B. 2 only — Statement 1 is incorrect because the Economic Cost of food grains includes the MSP, procurement incidentals (such as labor, transport, and storage), and distribution costs. Statement 2 is correct as the 2015 Shanta Kumar Committee explicitly recommended unbundling FCI, limiting open-ended procurement, and moving towards direct cash transfers in PDS.

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