Wheat procurement begins at slow pace

Written by Sandip Das | New Delhi | Updated: Apr 2 2014, 08:51am hrs
The government's wheat procurement drive for the 2014-15 season commenced on Tuesday, with only a small quantity of foodgrain being purchased by state government agencies in Punjab.

Official sources told FE that although the farmers have brought in their produce across the key northern states of Punjab and Haryana, the Food Corporation of India (FCI) and state government-owned firms could not purchase the chunk of wheat because "they were below the prescribed fair and average quality (FAQ)".

The agencies could not purchase any wheat from farmers in Haryana. Purchase operations could commence only in the Khanna market of Ludhiana, a food ministry official said.

A Punjab food department official said: Rains last month impacted the crop and arrivals in mandis may pick up only after a week or so."

A food ministry official also said unseasonal rains last month adversely impacted crops at several places, including Ferozepur, Gurdaspur and Tarn Taran in Punjab and a couple of districts in Haryana. We are expecting delay in crop arrival in mandis by a week or 10 days, the official had said earlier.

The Amritsar district had faced maximum crop loss because of hail, with the state's overall crop yield getting affected by 5-7%.

Last marketing season, Punjab and Haryana had contributed 10.8 million tonne (mt) and 5.8 mt of grain, respectively, to the central pool. For the 2014-15 period, FCI and state government-owned agencies in Punjab and Haryana are targeting a purchase of 11 mt and 6.5 mt respectively.

The government has set a higher target for procurement of the key foodgrain at 31 mt for the current 2014-15 marketing season. Last year, the government had to scale down the wheat procurement target from 34 mt to 26 mt and could eventually purchase only 25 mt from farmers.

Meanwhile, Madhya Pradesh State Civil Supplies Corporation began purchase operations on behalf of FCI in the third week of March and has lifted 3.4 lakh tonne of wheat till now. More than 4.5 mt of wheat was procured from farmers during the same period last year.

Madhya Pradesh is aiming at wheat procurement of 8 mt for 2014-15, against 6.3 mt purchased from farmers in the previous year.

The government had announced a R50 hike in minimum support price to R1,400 per quintal for wheat procurement.

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

As per the second advance estimate released last week, wheat production is likely to cross a record 95.6 mt in 2013-14 against 93.5 mt achieved in the previous year.

Wheat is a winter crop and mainly grown in Punjab, Haryana, Madhya Pradesh, UP and Rajasthan. The annual domestic consumption of wheat is around 76 mt.