Extension of wheat procurement dates to further enhance surplus availability & farmer’s income
In yet another very good move to benefit lakhs of farmers across the country, the Centre has asked wheat producing states and Union Territories with procurement closing dates expiring early, to continue the process till 31st May, 2022 or so. Now, Punjab, Haryana, Delhi and Jammu and Kashmir have been asked by to procure wheat till May 31. The Rajasthan government will be procuring the grain till June 10, while Uttar Pradesh, Madhya Pradesh, Gujarat and Himachal Pradesh will be doing it till June 25. The wheat procurement will continue in Uttarakhand till June 30, and in Bihar till July 15.
The Ministry of Food and Public Distribution and Consumer Affairs has also directed Food Corporation of India (FCI) to continue with wheat procurement under the central pool. The decision also comes in the wake of requests by state governments and Union Territories to continue the procurement process.
The decision has been taken to further enhance India’s surplus availability of grains. It has also been prompted by the lesser wheat procurement in the central pool during the current rabi market season than the previous season. Lesser procurement has primarily been caused by the higher market prices than the minimum support price and farmers have been selling wheat to private traders at higher prices, which is further benefiting the farmers from across the country.
Meanwhile, the Centre has also allowed the FCI to relax grain quality norms for wheat procurement from Punjab, Haryana and UT of Chandigarh. This decision is also going to immensely benefit the farmers who otherwise appeared to be in distress because of the shrivelled grains as an outcome of the extreme heat-wave that enveloped the northern part of the country in the month of March and April. The Centre has clearly conveyed that these adverse weather conditions are beyond the control of the farmers and hence, they should not be penalised for such natural phenomenon.
It is worth-mentioning here that under Centralized Procurement System, the procurement of foodgrains in Central Pool are undertaken either by FCI directly or state government agencies procure the foodgrains and handover the stocks to FCI for storage and subsequent issue against Government of India (GOI) allocations in the same state or movement of surplus stocks to other states. The cost of the foodgrains procured by state agencies is reimbursed by FCI as soon as the stocks are delivered to FCI as per cost-sheets issued by GOI.
Meanwhile, the procurement of wheat under central pool is progressing smoothly in Rabi Marketing Season 2022-23, in the States/UTs of Madhya Pradesh, Haryana, Punjab, Uttar Pradesh, Uttarakhand, Himachal Pradesh, J&K, Gujarat, Bihar& Rajasthan.
The wheat procurement under central pool has been less during ensuing RMS 2022-23 corresponding to previous RMS 2021-22, mainly due to the higher market prices than MSP, wherein farmers have been selling wheat to private traders. The Central government had on 13th May decided to restrict export wheat to rein in high prices of wheat, except in case of irrevocable letter of credit and requests from neighbouring/food-deficit countries. The government has clearly stated that from now onwards, export will be allowed only on the basis of permission granted by the Government. In its notification, Directorate General of Foreign Trade has said that there is a sudden spike in the global prices of wheat due to several factors, forcing us to take this decision.
However, India- the world’s second largest producer of the grain has had five consecutive years of record harvests of wheat till 2021. Hence, India is in a much comfortable position, when it comes to having overall surplus availability of grains and stocks as they will be higher in any case than the minimum requirements for the next one year.
Department of Food and Public Distribution (DFPD), just a couple of days earlier, had said that after meeting the requirement of welfare schemes in the year ahead, on April 1, 2023, India would have stocks of 80 LMT of wheat, well above the minimum requirement of 75 LMT. However, it did admit that wheat production is expected to be 1050 LMT, which is slightly lower than the initial estimate of 1110 LMT in FY 23 and year-end closing stocks are adequate after meeting all requirements.
The Minimum Support Price (MSP) is the rate at which the government agencies buy farm produce. It is based on a calculation of at least one and a half times the cost of production by farmers. Usually, market rates for many crops are below the MSP.
