Wheat procurement starts, may run into storage crunch

Written by Sandip Das | New Delhi | Updated: Apr 2 2013, 07:55am hrs
n To gather pace by mid-April as Centre sets out to buy 44 mt

The wheat procurement drive for the 2013-14 season by the Food Corporation of India (FCI) and state government-owned agencies formally commenced on Monday in key producing states of Punjab, Haryana, Madhya Pradesh and Rajasthan, with huge carry-forward stocks of more than 24 million tonne.

However due to recent rains, harvesting activities have been delayed by a week or so in both Punjab and Haryana.

The purchase operations are expected to pick up pace by mid-April, said an FCI official from Punjab, which is the biggest contributor to the central pool.

Due to significant carry-forward of wheat stocks of around 25 million tonne (mt), which far exceeds the requirements, FCI and state warehousing corporations in Punjab and Haryana are likely to face a huge storage crunch as the government sets out to purchase more than 44 mt of wheat during the next three months from farmers. During 2012-13, close to 39 mt of wheat was purchased by government agencies.

For the first time, wheat purchase has officially started in Punjab with last year's stocks of more than 9.4 mt while prior to the commencement of lastb years procurement, the carry-forward stock was only 5 mt.

During April 15-May 10, we expect to witness maximum wheat purchases, in the range of 5-8 lakh tonne daily , the FCI official from Punjab said.

Haryana has made arrangements for procuring 8.7 mt for the central pool during the coming season, which is similar to last year's wheat purchase. Punjab is expected to purchase a record 14 mt during the Rabi marketing season 2013-14.

Wheat production in Punjab and Haryana is estimated at 16.15 mt and 12.4 mt, respectively, for the current Rabi season.

Madhya Pradesh is estimated to procure about 13 mt this year, thus pushing Haryana to the third spot with a target of 8.7 mt. Punjab, however, will remain the biggest contributor to central pool with 14 mt.

Mainly due to the extra R100 per quintal bonus, the minimum support price (MSP) of R1,285 per quintal announced for 2012-13 and conducive weather conditions, MP and Rajasthan's contributions to the procurement drive have gone up.

We have been providing bonus to wheat farmers over the last few years and we want to become the single biggest contributor of wheat to the central pool in the next few years, chief minister Shivraj Singh Chauhan had told FE earlier.

The government is gearing up to buy wheat at an MSP of R1,350 per quintal from farmers by increasing the nnumber of purchase centres, from 10,000 to 12,000. In order to ensure immediate payments to farmers on delivery of wheat, a food ministry official said that the states have been asked to make available adequate funds for procurement agencies and ensure that farmers are paid via cheques.