The corrupt officers of the State Procurement agencies, the FCI, and the PDS workers are the people who are most benefited by this food security bill

In the first part of my expose I clearly discussed the workings of the officials who operated with the mill owners (in the process where paddy is converted to rice grains). In this part I am sharing some more of the remaining evidence. It is to be noted that due to this scam the government is facing heavy losses of around 200 crore per paddy season of Kharif from the Bhojpur district itself prior to the implementation of the food bill.

As in the first part where I clearly mentioned the workings of the system through which the grains are sent to the poor through the network of PDS. I also mentioned that after recording the complete incident I was attacked in a rice mill by the goons of the same mafias who are involved in the scam. I was trapped in a false case of Dacoity under Jagadishpur PS of Bhojpur district (FIR No 185/13) under section 448/341/323/379/504/34 of IPC. But despite looking at the evidence the Bhojpur Police made our case false and instead granted bail to the culprits as these people have power and hold over the police – so much so that I couldn’t move ahead with my investigations to expose the main face behind the scam of government supplied food grains.

To top it all – On 11th September 2013 at 14 hours 21 minutes I got the call from the Investigating Officer of my case informing me that the case lodged against us had been found true and one more section of IPC 384 has been imposed on us for extortion with the concerned rice mill Jai Mata Di in Diul under Jagadishpur block of Bhojpur district . And I need to move to Court to get a Bail for the same.

Government Feeding the Corrupt Through its Policies

The Government of India, is clearly stating to the public that it is reducing all subsidy. Government has reduced the subsidiary on LPG, fuels and many other services to recover from the losses faced by the economy. But the losses will be huge from the passage of this food security bill. I am just starting from the statistics/numbers of a single district.

In the current system the rice grains supplied to the public distribution system costs Rs 622 per quintal. So on every quintal government faces a loss of Rs 1543 as the cost of acquisition from the Food Corporation of India (which in turn buys from the mill owners and in turn from the farmers) is Rs 2165 per quintal. If the food security bill is implemented then the same rice will be sold to the public distribution system for Rs 300 increasing the losses due to subsidy.

To give you an idea of the size of the problem : In the last fiscal year 2012-13 Bihar State Food Corporation (B.S.F.C) bought 12 lakh 55 thousand quintals of paddy from the farmers.

The additional loss from the implementation of the food subsidy bill is evident. Rice grains are obtained from the paddy in the ratio of 67:100. So the purchase of 12 lakh plus quintals of paddy implies a production of over 8 lakhs quintals of rice. Therefore, just in the Bhojpur district the loss will be Rs 300 times eight lakh quintals quintals of rice or around twenty five crores additional loss on the implementation of the food security bill.

How money is made out of the scam

The biggest question among us is that how the money is illegally made by the traders and officers in the current system.

For understanding this we need to discuss all the people involved here who are responsible for delivering the grain to the concerned nodal agency they represent i.e. FCI and BSFC.

So let’s start with the roles of all involved:

BSFC: The main nodal agency here in Bihar responsible for collecting the paddy from the farmers through the PACs. Gets the data for the amount of grain required for the Public Distribution System, Mid day Meal Scheme and many other schemes for the masses. BSFC have their DMs, AGM and MO in every district to collect the data of the grains required for distribution.

FCI: Food Corporation of India is the main body for delivering the grains to the Public Distribution System (PDS) in a transparent manner.

The role of its officers

DM, BSFC: His key role is to look at the total amount of paddy collected from the farmers. Get the agreement done with the rice millers, hire a transporter through tender for transporting the grains and to maintain the co-ordination with the Marketing officers and Assistant Gowdown managers for demand and supply of grains in every block of district. And also maintain the co-ordination with the FCI manager for the demand and supply of grains.

AGM: AGM are responsible for maintaining the stock of their respective gowdowms available to them in the block of the district. These people look to the supply of the grains and as well as the supply of paddy to the rice mills.

MO: MO are responsible for maintaining the records of the PDS people and the amount of the grains required by them in the panchayat of their block. These people also look to the proper functioning of PDS so that the transparency is maintained in the complete system as these people report to the DM (SFC), SDO and other concerned officers of the district.

So these are basic functions of these officers. But instead of performing their duty what do they do?

Organized Corruption

When I spoke to few people in the PDS then I came to know the modus operandi of the AGM and MOs. There is a fixed commission (read bribe) for all AGM and MO’s – Both during the procurement of rice by the PDS and also when the rice is sold illegally in the black market.

Now the total commission (apparently) is Rs 125 per quintal paid to the officers (as bribe). But by doing so and selling the rice grains in the open market at Rs 2165 as against the acquisition cost of Rs 622 per quintal an easy net profit is pocketed by the workers of the PDS. On an average every PDS loses 3-4 months of grains every year – this helps to hide the amounts sold in the black market. And this goes on in an organised manner. As in every panchayat there are at least 2 PDS. In Bhojpur itself there are 228 panchayats and 1220 villages. So the total amount of grains is easily shifted and managed easily at every level without any one realizing. And thus the officers and the rice millers and the corrupt PDS workers are the people who are most benefited by this food scheme of government. Where these people invest a very small amount and earn in crores within a year by just stealing and playing with the records of the government.

And hence the grains meant for the poor masses doesnt really reach them. Instead the current system just allows the rice mill owners (covered in detail in my previous post) and its other officers make handsome illegal profits with people’s money.

In the next part I shall be sharing some details with the stats of the government of last five years when NAFED and BISCOMAN were the nodal agencies here in Bihar.

Also See:
Food Security Bill – Fodder For The Corrupt
Who wants this food security bill (other than the congress) ?
Proposed Food Security Bill – Will It Be A Relief For The Aam Aadmi ?

Note : After the initial post in IndiaOpines, there was another expose on this scam by Aaj Tak possibly as a follow up to the India Opines article

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