Explanation:

First option is correct.

Shanta Kumar Committee has recently submitted its report to the Prime Minister. The committee was constituted for restructuring of Food Corporation of India (FCI).

Important recommendations made-

• Reduce the number of beneficiaries under the Food Security Act—from the current 67 per cent to 40 per cent.
• Allow private players to procure and store food grains.
•  Stop bonuses on minimum support price (MSP) paid by states to farmers, and adopt cash transfer system so that MSP and food subsidy amounts can be directly transferred to the accounts of farmers and food security beneficiaries.
• FCI should involve itself in full-fledged grains procurement only in those states which are poor in procurement. In the case of those states which are performing well, like Haryana, Punjab, Andhra Pradesh, Chhattisgarh, Madhya Pradesh and Odisha, the states should do the procurement.
• Abolishing levy rice: Under levy rice policy, government buys certain percentage of rice (varies from 25 to 75 per cent in states) from the mills compulsorily, which is called levy rice. Mills are allowed to sell only the remainder in the open market.
• Deregulate fertiliser sector and provide cash fertiliser subsidy of Rs 7,000 per hectare to farmers.
• outsource of stocking of grains: The committee calls for setting up of negotiable warehouse receipt (NWR) system. In the new system, farmers can deposit their produce in these registered warehouses and get 80 per cent of the advance from bank against their produce on the basis of MSP.
• Clear and transparent liquidation policy for buffer stock: FCI should be given greater flexibility in doing business; it should offload surplus stock in open market or export, as per need.