Encouraged by bumper wheat output and higher remunerative price, the state-owned Food Corporation of India (FCI) plans to end its current procurement drive with a record 25 million tonne.
According to FCI data released on Wednesday, the wheat procurement till now has reached 24.25 mt and the corporation is still lifting grains in states such as Uttar Pradesh, Madhya Pradesh and Bihar.
The record procurement is a comforting news for the government as it has not only enough buffer stocks but also has stocks for the sale of subsidised food grains to poor families which the UPA government plans to launch.
The wheat procurement in Haryana and Punjab have already finished with two states contributing close to 16 mt of wheat, more than 70% of the total lifting by the FCI and state owned agencies.
In Uttar Pradesh, FCI has purchased 3.3 mt of wheat while in Rajasthan and Madhya Pradesh, the state agency has lifted 1.8 mt and 1.1 mt. Purchase in Bihar, an emerging state as far as wheat production goes, has been only 7.9 lakh tonne.
?We are aiming at closing the wheat procurement drive at 25 mt,? a FCI official told FE.
Last year after two consecutive years of shortfall in lifting, the FCI procured a record 22.6 mt of wheat. During 2006-7 & 2007-08, the government had procured only 9.2 mt and 11.1 mt respectively, which eventually forced the government to import wheat.
As reported by FE earlier, due to higher MSP announced by the government this year in the back drop of huge stocks of wheat in the country, the market prices of wheat is below the Rs 1,080 per quintal as offered under MSP.
This has forced the private traders out of the country?s largest wheat producing states – Haryana and Punjab. Sources had told FE that, the private wheat trade is gradually shifting their base to states like Uttar Pradesh and Bihar as the market price of wheat is well below MSP as these states.
According to government estimates, the country has produced 77.63 mt of wheat in 2009, which is marginally lower from a record output 77.78 mt achieved last year.
Besides wheat, the stocks of rice have also increased over the last few months. FCI official said the corporation is likely to buy 32 mt of rice in the current marketing year (till September 2009), against 28.4 mt purchased last year. The agency has bought 29.9 mt of rice from farmers since October 2008 when the new marketing year began against 25.3 mt purchased a year ago.