Centre proposes direct-to-shop distribution of supply for Rs 150 cr profit

Kottayam: The Indian Department of Food and Public Distribution (DFPD) is advocating for a change in Kerala's ration distribution system, aiming to reduce costs. Currently, food grains travel from Food Corporation of India (FCI) godowns to Supplyco warehouses before reaching ration shops, incurring huge expenses for the State.

Kerala spends approximately Rs 300 crore annually on transporting grains from Supplyco warehouses to ration shops. The Centre suggests that delivering grains directly to shops could cut costs by half.

As of now, Supplyco allocates Rs 21 crore monthly for expenses like godown rent, loading, unloading, bagging, supervision, and vehicle hire. About Rs 25 crore is spent monthly on contractors responsible for doorstep delivery to shops, which the State government has not fully reimbursed since 2018, contributing to Supplyco's financial strain.

In the past three budgets, Rs 798 crore was allocated for doorstep ration distribution, of which Rs 710 crore has been spent. A debt of Rs 281.13 crore is owed to Supplyco as well. This debt has added to the company's financial difficulties.

Additional costs

• Supplyco created additional positions in 2018 to facilitate transportation and distribution. This includes eight managerial roles at the head office and 310 positions in various godowns.
• The workload doubled, and there are now 4,100 workers receiving salaries. The Minister of Food and Civil Supplies, Kerala, has emphasised that any reforms must prioritise job protection.
• On average, Supplyco handles 1.12 lakh tonnes of grain monthly across 179 godowns in 75 taluks. These include 62 rented from the State Warehousing Corporation, 20 from the Central Warehousing Corporation, and 90 from the private sector, costing monthly rents totaling up to Rs 5 crores. Supplyco owns only seven godowns. Direct distribution from FCI godowns would eliminate the need for many of these rented facilities, resulting in substantial savings on rent.
• Purchase of empty sacks
• If more than one tonne of grain needs to be re-bagged, an additional allowance of Rs 10 will be provided for every additional 50 kg. The cleaning staff is responsible for filling up to one tonne.