Govt’s wheat procurement target still a distant dream

Meeting the target of wheat procurement appears to be an uphill task for the government. It missed the goal last year and this year too the scenario is unlikely to be any different. The Food Corporation of India (FCI) had estimated procurement of 341.50 lakh metric tonne of wheat during the Rabi Market Season (RMS) 2023-24. But even after procuring some 252 lakh tonne till last week, there is a shortfall of 89.5 lakh tonne.

The Rural Voice had reported on May 1 itself that wheat procurement would cross 250 lakh tonne, thereby averting a dismal showing like last year. The exclusive report had said that major wheat growing states like Punjab and Haryana have stonewalled any crisis.

Data provided by the Union Food Ministry till May 9, though, presents a positive picture. It says the procurement has already breached the 18.8 million tonnes mark achieved in the full 2022-23 marketing year (April-March). It says the government's wheat procurement of 25.2 million tonne so far in the ongoing 2023-24 marketing year, is 75 lakh tonne more than the procurement done till the same date in 2022-23. In other words, it is 42 per cent more than the year-ago period. But one cannot gloss over the fact that in 2022-23, the total procurement was only 187.92 lakh tonne, which was less than half of the target of 444 lakh tonne.

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But states like Punjab, Haryana and Madhya Pradesh cannot produce beyond a limit to help the government achieve its procurement target as the gap of 89.5 lakh tonne appears to be huge. This is because FCI procurement is in the final stages in major states like Punjab, Haryana and Madhya Pradesh, which have the largest share in the central pool.  Apprehending non-fulfillment of the target, the Madhya Pradesh government has extended the last date of government procurement from May 10 to May 20.

The Rural Voice in its earlier report had expressed apprehension that there is little possibility of meeting the target this year as well. In Uttar Pradesh, the state that produces maximum wheat, the government procurement has not reached even 10 per cent of the target. A target was set to procure 35 lakh tonne of wheat in Uttar Pradesh this year. But, till now the procurement has not even crossed 2.5 lakh tonne, though June 15 has been fixed as the deadline for government procurement of wheat in the state.

Wheat is the main rabi crop and the government has kept a procurement target of 34.15 million tonne for the current marketing year. Although the marketing year runs from April to March, the bulk of the procurement is done between April to June. A ministry statement admitted that a major contribution has come from three key wheat procuring states of Punjab, Haryana and Madhya Pradesh.

Punjab has procured 118.68 lakh tonne of wheat till May 9 against the target of 132 lakh tonne (including Chandigarh). Similarly, in Haryana, the target is 75 lakh tonne and so far 62.18 lakh tonne have been procured. Government procurement of 66.50 lakh tonne of wheat has been done in Madhya Pradesh till May 9, while the target is 80 lakh tonnes.

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The official data shows that the pace of government procurement has slowed down and it may hardly be possible for it to achieve the remaining target of 89.5 lakh tonne. According to the data of the Food Corporation of India, till May 4, 2023, some 240 lakh tonne of wheat was procured. In the next 5 days i.e. till May 9, only 12 lakh tonne could be procured. Procurement at even this pace will take around 40 days to achieve the remaining target of 89.5 lakh tonne, which does not seem possible in any way because the procurement in major states like Punjab, Haryana and Madhya Pradesh is almost in the final lap.

According to the ministry, 20 lakh farmers have already been benefitted so far from the ongoing wheat procurement operations, with MSP (minimum support price) payment of more than Rs 47,000 crores directly credited to their bank accounts. More farmers are yet to be benefitted since the procurement is continuing smoothly as on a daily average more than 2 lakh tonne wheat is still being procured, it said.

State-run Food Corporation of India (FCI) along with other state agencies are engaged in the procurement operations. One of the major factors contributing to the progressive procurement this year, the ministry said, is the relaxation in quality specifications of wheat being procured by the central government. "This has been granted in view of untimely rains leading to lusture loss. This will reduce the hardship of farmers and check any distress sale.

In addition to already existing designated procurement centres, the central government this year has also allowed all states to open procurement centres at villages/panchayat level and to carry out the procurement through co-operative Societies/ Gram Panchayats/ Arhatias, etc for better outreach.

Due to lower production and higher global demand, FCI's procurement in the 2022-23 marketing year had declined to 18.8 million tonne from the record 43.3 million tonne purchased from the farmers in the previous year. Last year, the market price of wheat was higher than the minimum support price (MSP) of Rs 2015 since the beginning of the new crop.

Wheat production was affected due to a sudden rise in temperature in March last year, leading to higher prices. In view of this, instead of selling their crops to the government, the farmers preferred to sell them to private traders. Government procurement was stuck at 187.92 lakh tonne even after banning wheat exports and relaxing norms.

Worried over the current scenario, the government upheld its ban on the export of wheat. Along with this, about 40 lakh tonne of wheat was also sold under the open market sale scheme from January to March, 2023 due to which the prices of wheat fell. This time the MSP of wheat is Rs 2,125 per quintal.