Wheat procurement down 62% as rains in Punjab delay harvest

Written by Sandip Das | Updated: Apr 22 2014, 09:46am hrs
The government's wheat procurement drive for the current marketing season (2014-15) is progressing at a slow note because of delays in arrivals of the foodgrain across mandis in Punjab, the biggest contributor to the central pool.

According to food ministry data, the Food Corporation of India (FCI) and state government-owned agencies in key growing states Punjab, Haryana, Madhya Pradesh, Rajasthan and Uttar Pradesh have purchased only 6.7 million tonne (mt) of foodgrain from farmers till Monday, against 10.9 mt purchased during the same period last year. This is a decline of 62% compared to last year.

The government has set a wheat procurement target of 31 mt for the current year.

A food ministry official told FE that the slowdown in procurement is mainly due to delay in harvesting because of unseasonal rains which lashed Punjab late last month. FCI and state government agencies such as Pungrain have lifted only 6 lakh tonne of wheat from Punjab farmers till Monday, against 3.5 mt purchased during the same period last year.

An official from Pungrain said procurement would pick up pace in the coming days. The government has set an 11-mt wheat procurement target for Punjab. The procurement drive for the year formally commences on April 1 and winds up by May in key growing states, although officially it continues till June.

Till Monday, the agencies have purchased 2.7 mt of wheat against 3.6 mt lifted during the same period last year. Similarly, Madhya Pradesh Civil Supplies Corporation has purchased 3.1 mt of wheat from farmers till now, which is a marginal decline from last year. Others states such Rajasthan (1.5 lakh tonne) and Uttar Pradesh (23,000 tonne) have contributed marginally to the procurement drive.

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.

In the 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 farmers last year.

Other states who have set higher procurement targets include Uttar Pradesh (3 mt) and Rajasthan (1.8 mt).

A food ministry official had earlier stated that lower wheat procurement during 2013-14, mainly attributed to increase in private purchases and a decline in wheat production, were the key factors behind lower procurement of grain this year.

The government had announced a R50 hike in minimum support price to R1,400 per quintal for wheat procurement for the 2014-15 marketing season.

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.