Govt has wheat surplus thrice over

Written by Sandip Das | New Delhi | Updated: Jan 9 2013, 09:07am hrs
With the wheat procurement drive for the 2013-2014 season to begin in April, the Centre is holding on to wheat stocks more than three times the strategic reserve and buffer stock norms.

At the beginning of this month, the Food Corporation of India (FCI) and state government-owned agencies had wheat stocks of more than 34 million tonne, while the norm is to have maximum of 10 million tonnes.

This means if a chunk of the stocks is not liquidated into the private market or exported during next few months, the government could face an acute storage crunch when purchase operations begin from April 1.

We need to create space for the new wheat crop during next three months, a FCI official told FE.

As per the latest data, the governments foodgrain stocks (consisting mostly of wheat and rice) at the start of the month is reported at more than 66 million tonne against the norms of only 25 million tonne. The rice stock is at present reported at 32.2 million tonne. The current food stocks are also at an alarming level as the FCI and other agencies have storage capacities to keep food grains to the tune of 61 million tonne. This includes 18 mt of cover and plinth capacity that cant keep the grains intact for more than a few weeks.

Meanwhile, the Commission for Agricultural Costs and Prices (CACP) has suggested that the government should push for wheat exports of a record 10 million tonne from its huge stocks during next fiscal.

A 10-million-tonne wheat export can be achieved in the 2013-14 fiscal, if the government acts aggressively and quickly, CACP chairman Ashok Gulati recently stated.

India, the second-biggest wheat producer in the world, has allowed wheat exports of 4.5 million tonne from government reserves during the current fiscal. After the FCI winded up wheat purchase operations for the current year at a record of around 39 mt in June last year, there had been shortage of wheat in the private market as government has lifted more than 39% of the total production in excess of 93 million tonne.

Around two million tonne of grain is distributed monthly in different states under the Targetted Public Distribution System (TPDS).

Besides, the FCI keeps requisite amount of foodgrains for strategic reserve and buffer stocks norms and some amount is allocated to the armed forces.

Because of a bumper grain output in the last few years, the government has been keeping more grain than required under the strategic reserve and buffer stock norms.

Due to an open policy of procurement, the FCI has been lifting grain from all the farmers leading to the huge stocks .