The Food Corporation of India (FCI) is a statutory body and a Central Government agency operating under the Ministry of Consumer Affairs, Food and Public Distribution. It was established on January 14, 1965, under the Food Corporations Act, 1964, to implement the National Food Policy. The Corporation was created against the backdrop of a major shortage of grains, particularly wheat, and the need for a centralized mechanism to manage food distribution.
The FCI's core mechanism is defined by the Food Corporations Act, 1964, with Section 3 establishing the Corporation and Section 13 outlining its functions. Its primary duties are to ensure national food security by undertaking the procurement, storage, movement, and distribution of food grains. The FCI procures grains like wheat and rice from farmers at the Minimum Support Price (MSP), a rate recommended by the Commission for Agricultural Costs and Prices (CACP), which was also created in 1965. It maintains a buffer stock to stabilize prices and mitigate shortages.
The FCI is the operational backbone of the Public Distribution System (PDS), distributing food grains to vulnerable sections of society. Its role was significantly reinforced by the National Food Security Act, 2013, which commits to distributing grains at highly subsidized prices.
In terms of recent changes, the Food Corporations Act, 1964, saw a 2023 Amendment that omitted certain penal provisions under Section 41. Furthermore, the Centre discontinued the sale of rice and wheat to state governments under the Open Market Sale Scheme (OMSS) in June 2023. There are also plans to reduce the allocation of broken rice in the PDS from 25 per cent to 10 per cent to free up approximately 90 lakh tonne for the ethanol industry.