Wheat hoarding to hit FCI targets

Chandigarh, Apr 29 | Updated: Apr 30 2007, 06:05am hrs
Food Corporation of Indias (FCIs) wheat-buying target is set to take a 10-15% hit this year as farmers in Punjab and Haryana are hoarding wheat, expecting better prices in the coming days. The government hopes to procure 11 million tonne of wheat from Punjab and Haryana for supplies through the public distribution system (PDS).

Last year, only a few big farmers blocked stock in Punjab. This year, a lot many small farmers seem to have joined them. Farmers in Punjab alone have held around 1.5-2 million tonne of wheat back, said traders. If Haryana farmers were included, the stock held back could be as high as 2.5 million tonne, they noted.

Last year, procurement fell short by 23% in Punjab and 51% in Haryana, creating a serious buffer stock problem for PDS supply. This year, the wheat market surplus (produce available for sale) in Punjab and Haryana is assessed to be more than 9 and 4 million tonne, respectively.

Of the 15 million tonne procurement target set by FCI, Punjab is expected to bring in a chunk of 9 million tonne and Haryana, another 4 million tonne. Targets for Uttar Pradesh, Madhya Pradesh and Rajasthan are 1.5 million tonne, 3 lakh tonne and 2 lakh tonne, respectively.

Compared with the last year, Haryana is expected to put up a better show, with state agencies buying 17.6 lakh tonne on Saturday. Despite this, Haryanas target for the current year could fall short by a million tonne, experts said.

Last year, prices surged to Rs 1,150 per quintal in Punjab and Haryana. This year, it has failed to go beyond Rs 900 despite a better MSP of Rs 800 a quintal. So, farmers expect prices in the open market to rise to near last year levels.

Majority of farmers except those who have taken debt are holding back their produce. Large farmers have bought wheat from small farmers, a wheat grower said. Farmers today have expertise to store the grain for months without much weight or moisture loss, he claimed.