Centre banks big on bumper crop, sets 31-mt target for wheat purchase

Written by Sandip Das | New Delhi | Updated: Feb 19 2014, 10:41am hrs
Anticipating a bumper wheat crop, the government has set a higher target for procurement of the key foodgrain at 31 million tonne (mt) for the current marketing season.

Last year, the government had to scale down the procurement target from 34 mt to 26 mt and eventually ended up purchasing 25 mt of grain from farmers.

Higher wheat procurement target for this year was arrived after a meeting of food secretaries of key growing states, including Punjab, Haryana, Madhya Pradesh, Uttar Pradesh and Rajasthan, a food ministry official told FE.

More than 12,000 centres would opened across all the growing states for the wheat procurement, which begins from April 1.

Despite selling excess stocks to private traders through the Open Market Sale Scheme (OMSS) and exporting 2 mt for the current fiscal, the government would still have carry over stocks of around 22 mt. At the start of the month, government agencies such as Food Corporation of India (FCI) and state agencies had wheat stock of 28 mt.

Last (2013-14) marketing season, Punjab and Haryana contributed 10.8 mt and 5.8 mt to the central pool. For the 2014-15 period, government agencies in Punjab and Haryana are expected to purchase 11 mt and 6.5 mt, respectively.

Similarly, Madhya Pradesh has set a higher wheat procurement target of 8 mt for 2014-15, against 6.3 mt purchased from the farmers last year.

Other states who have set higher procurement targets include Uttar Pradesh (3 mt) and Rajasthan (1.8 mt). Rajasthan and Uttar Pradesh contributed 1.2 mt and 6.6 lakh tonne of wheat to the central pool.

A food ministry official had earlier stated that lower wheat procurement during 2013-14 period mainly attributed to an increase in private purchases and a decline in wheat production were the key factors for the lower procurement of grain this year. The government had announced a Rs 50 hike in the minimum support price (MSP) to Rs 1,400 per quintal for wheat procurement for 2014-15 marketing season.

In order to ensure immediate payments to farmers on delivery of wheat, a food ministry official said the states have been asked to make available adequate funds for procurement agencies and farmers should be paid via cheque.

FCI purchases wheat from farmers for allocating it to states for distribution under the targeted public distribution system (TPDS) and maintaining buffer stocks and strategic reserves norms.