Rabi wheat purchases likely to miss record due to delayed start of purchase, lower arrivals

Published: May 16, 2020 5:45:16 AM

Contrary to expectations, wheat procurement in the ongoing season may not exceed the record of 38.15 million tonne (MT) achieved during the corresponding season in 2012-13 season due to a delayed start of purchase and lower arrivals of the key rabi cereal crop

This has, however, come as a blessing in disguise for the Food Corporation of India, which is grappling with high stocks.

By Prabhudatta Mishra

Contrary to expectations, wheat procurement in the ongoing season may not exceed the record of 38.15 million tonne (MT) achieved during the corresponding season in 2012-13 season due to a delayed start of purchase and lower arrivals of the key rabi cereal crop. This has, however, come as a blessing in disguise for the Food Corporation of India, which is grappling with high stocks.

The FCI wheat stocks are more than the annual requirement of the grain under the National Food Security Act (NFSA).

The rabi procurement of wheat may be 36.5-37 MT in 2020-21, against 34.13 MT last year, mainly due to an expected shortfall on Uttar Pradesh and Haryana. Uttar Pradesh, country’s largest wheat producer, has so far bought 1.4 MT against targeted 5.5 MT and may end up at below 3.5 MT. Similarly, Haryana had estimated to buy 9.5 MT, but has been able to purchase only 6.4 MT and it can at best mop up 1 MT more by the end of the season, sources said.

The food ministry has been maintaining that targeted procurement of 40.7 MT will be achieved since the FCI was able to buy half of the target in first 22 days. Official purchase started from April 15, against the normal schedule from April 1 due to initial lockdown restrictions. The agriculture ministry on Friday revised upwards the production of wheat at record 107.18 MT during 2019-20 crop year (July-June), up by 3.5%, y-o-y. The previous estimate, released in February, had pegged it at 106.21 MT. The FCI has 40 MT of wheat in its stock as on May 12, against about 30-31 MT required for NFSA and other programmes per year.

Madhya Pradesh, which has so far purchased 7.85 MT, informed the Centre that the procurement could be higher by 1 MT from the previous target of 10 MT. The slow arrival of wheat in the state has been attributed to farmers coming in batches to the procurement centres as per capacity to handle due to social distancing norms. Rajasthan is also likely to exceed its targeted 1.7 MT to reach near 2 MT, the sources said.

Punjab, the largest contributor of wheat to the Central Pool stocks, has purchased 12.07 MT against its target of 13.5 MT while state officials maintain that the final tally may be around 13 MT at the end of the season. One of the major factors for fairly good progress in procurement is lower rejection of the crop as FCI has relaxed quality norms following farmers’ demand. The wheat crop in many parts was affected due to unseasonal rains and hailstorms in March-April.

Out of the total quantity of wheat that arrived at procurement centres, FCI and state agencies have purchased over 97% this year whereas it was 95% of arrival last year.

“Farmers are keeping more wheat for consumption and payment for labour, as per their holding capacities. Earlier, they used to pay labour in cash, but due to heavy losses in vegetables due to lockdown, payment to labour will be made by giving them wheat. Unless, the government gives direct monetary support, many farmers in villages will not be able to make payment in cash,” said Dharmendra Malik, general secretary of Bharatiya Kisan Union (BKU).

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