All thanks to rise in exports and Open Market Sale Scheme (OMSS) for bulk buyers, the acute grain storage crisis faced by the government a few months ago is beginning to ease out.
According to latest data available with Food Corporation of India (FCI), grain stocks, essentially consisting of rice and wheat, have declined to a manageable 66.5 million tonne at the start of this month from a peak of 82 mt in June.
At present, the government has a stock of 23.3 mt of rice and 43 mt of wheat, which is far above the requirement for strategic reserve and buffer stocks norms of 21 mt. The FCI and state government-owned agencies have storage capacities of around 61 million tonnes that includes 18 million tonnes of CAP (cover and plinth) capacity that can?t keep grain intact for more than a few weeks.
Decline in grain stocks has been attributed to about three million tonne of wheat exports and an equal amount uploaded under the Open Market Sale Scheme (OMSS) to bulk buyers. Besides, a monthly allocation of about 4 million tonne of grain is done under the Targeted Public Distribution System (TPDS).
?With the lowering of grain stocks, there are hardly any stocks kept in the temporary facilities,? an FCI official told FE. However, the scenario could change in the next few months as the government?s rice procurement drive grain pace.
The FCI winded up wheat purchase operations for the current year at close to a record 39 million tonne in July. The government has now set a rice procurement target of 40 million tonne for the current season, which is rise of more than 14% from the previous year.
Rice procurement, which has already commenced in Punjab and Haryana, is expected to gain momentum as farmers bring in their produce to mandis in key contributing states of Andhra Pradesh, Chhattisgarh, Orissa and Uttar Pradesh over the next few months.
?We need to have a long-term plan about the procurement and storage capacities so that food grains wastages are curbed,? said the official.
In June, food minister KV Thomas had directed an immediate evacuation of the grain stored at temporary godowns as they could be destroyed. Even the opposition parties had criticised the government for sitting on huge grain stocks. They said such stocks stored unscientifically can lead to acute storage crunch.
Besides providing tax and several other concessions to create more storage capacity, exports of food grains, the rural development ministry is working on providing grain under National Rural Employment Guarantee Act (NREGA) workers as part of their wages.
Meanwhile, the market price of wheat has risen to more than R1,900 per quintal in key growing states of northern India. Private traders have asked the government to release more wheat stock into the market under OMSS.
?When farmers were bringing in wheat to the mandis from April to June, private traders did not intervene then. Traders or millers should have offered farmers better price than the minimum support price (MSP) for their stocks,? Union food minister KV Thomas had told FE.
