Wheat procurement likely to miss target for 3rd year

By Jitendra Choubey

It is going to be the third straight year when the Government of India will miss its wheat procurement target. Despite the bumper wheat production and additional bonus over minimum support price being provided in a few states, the farmers are unwilling to sell it to the government agencies.

Against the target of 372 Lakh Metric Tonnes (LMT), the government’s procurement agencies acquired 257 LMT by May 16, 2024, which is less than 70% of its target and slightly less than the previous year.

“We are expecting our procurement to be around 267-268 LMT by the end of May,” said Ashok K Meena, chief managing director, Food Corporation of India (FCI).

In view of lesser procurement, the Centre has extended its procurement deadline to May 31. As per schedule, wheat procurement was scheduled to end on May 10 in Rajasthan and on May 15 in Uttar Pradesh, Madhya Pradesh, Gujarat, Himachal Pradesh and Bihar.

This year’s procurement is critical for the country’s food security as the FCI missed its procurement target from the past two years. In April, India’s buffer stock reached a seven-year low. On April 1, the wheat buffer stock reached 76 LMT, which was minimally above the required level.

India annually requires 184 LMT of wheat under its flagship National Food Security Scheme, to provide free grains to 80 crore people.

Meanwhile, in 2022-23, the government set a target to procure 440 LMT but was able to procure only around 42% of its target, or 187 LMT. Further in 2023-24, the government set a target to procure 341 LMT but ended up buying only 262 LMT.

In order to procure aggressively to keep up its buffer stock, the government didn’t let traders, processors and stockists in the wheat market till May 31. Besides, the government also had put a stock limit on the private stockholders to refrain them from hoarding.

According to sources, this time the internal target was set to around 310-320 LMT. “But the enthusiasm shown by the Uttar Pradesh government to contribute record wheat to the Central pool has increased our target,” said a senior officer.

“Last year, UP contributed just over 2 LMT. This year, they showed commitment to contribute a whopping 60 LMT. Till now, UP contributed only 8.6 LMT,” he added.

So far, Punjab is at the top of the list, followed by Haryana and Madhya Pradesh. The contribution from Madhya Pradesh is a cause of concern. Last year, MP was over 12% shortfall of its stated target. This year MP has a shortfall of over 40% of its target.

Currently, the government provides Rs 2275 per quintal. Rajasthan and Madhya Pradesh government have been providing additional Rs 125 per quintal bonus, which comes around Rs 2,400.

Experts say farmers have stocked up wheat to sell later when wheat prices will go up in coming months.

This article has been republished from The New Indian Express.