New Delhi: Bolstering the official estimates of a bumper wheat crop, procurement of the foodgrain from farmers by government agencies touched 24.6 million tonnes (mt) on Tuesday, 18% higher than the 20.8 mt procured by this time last year.
While the procurement so far is higher than the 23 mt purchased last year during the entire April-June rabi marketing season, it is about 75% of the 33 mt targeted for this year (2017-18).
The robust procurement lends credence to the agriculture ministry’s advance estimates of a record 96.6 mt of wheat harvest in 2016-17, following a normal monsoon last year. Higher procurement will not only help replenish government stocks, which dipped to a nine-year low of 9.4 mt in early March, it will also keep retail prices in check.
In 2015-16, poor rains cut India’s wheat crop to a low of 92.3 mt, leading to higher retail prices and a surge in imports to 5.5 mt.
On 28 March, the centre reinstated the 10% import duty on wheat (it abolished the duty in December) to protect local prices from dipping below government-announced minimum support prices (MSP).
The government procures wheat from farmers at an MSP of Rs1,625 per quintal and distributes it under the subsidized public distribution system.
Data on state-wise procurement shows most of the wheat is purchased from farmers in Punjab, Haryana and Madhya Pradesh, with the largest wheat producing state of Uttar Pradesh at usual lows.
Government agencies have procured 11 mt of wheat from Punjab, followed by 7 mt from Haryana and about 5 mt from Madhya Pradesh—accounting for over 93% of the 24.6 mt procured so far.
In comparison, procurement in Uttar Pradesh stands at a dismal 0.9 mt, far short of the 3 mt targeted by the food ministry. Last month, the state’s newly elected chief minister, Yogi Adityanath, said the government will ramp up procurement infrastructure and purchase 8 mt at assured prices from farmers.
“Lack of logistics and storage facilities is proving to be a hurdle for Uttar Pradesh to ramp up procurement,” said Prerana Desai, vice-president, research, at Edelweiss Agri Services and Credit.
“Overall, we are sceptical if the food ministry will be able to procure the targeted 33 mt,” Desai said, adding, “normally the process gets over by mid-May and we may see the government extending the deadline if actual procurement falls short of the target.”
Desai further said due to favourable weather and higher sowing, India’s wheat crop may come in at a high of 97.7 mt (2016-17), surpassing the agriculture ministry’s second advance estimate of 96.6 mt.