India: Multi-agency approach to help govt get 34 mt wheat

The department of food and public distribution will ensure procurement of 34 million tonnes of wheat in the ongoing 2023-24 rabi marketing season by taking a multi-agency procurement approach.

Falling market arrivals are lowering the pace of wheat procurement by the government, particularly in Rajasthan, Uttar Pradesh and Bihar.

In these states, procurement of wheat has been lower due to the better prices offered by traders and millers, which attract induce farmers to sell in the market rather than to the government.

Currently, the department of food and public distribution procures wheat only through Food Corp of India (FCI), which so far in the current rabi marketing season has purchased 26.1 mt against its estimated target of 34.1 mt.

With the new multi-agency approach, other than FCI, National Agricultural Cooperative Marketing Federation of India (NAFED), Panchayats and non-DCP (decentralised procurement scheme) will be used to ensure the target is met.

Queries mailed to the ministry of food and public distribution remained unanswered at press time.

The government fixes an estimated target for procurement of grains like wheat taking the maximum figure into consideration, so that funds are arranged in prior hand and payment could be made to farmers at the earliest after the purchase.

Wheat in key mandis of Uttar Pradesh and Rajasthan is currently being traded in the range of ₹2,475-2,480 per quintal, wherein the grain is priced at ₹2,400-2,450 a quintal in major mandis of Bihar, according to spot trade sources. The government fixed wheat minimum support price at ₹2,125 a quintal for 2023-24 rabi marketing season.

FCI has purchased about 424,885 tonnes of wheat from farmers in Rajasthan, 214,981 tonnes from Uttar Pradesh farmers and 589 tonnes from Bihar mandis. During the corresponding period last year, the agency could procure 276,043 tonnes of wheat from Uttar Pradesh, 3,236 tonnes from Bihar and 1,462 tonnes from Rajasthan farmers, as per the data by the agency.

In the 2022-23 (October-March) rabi marketing season, FCI had procured 18.7 MT of wheat across the country.

“Wheat procurement has almost come to an end as farmers are holding back their produce in anticipation of remunerative prices like last year. This has lowered supply in the market. Otherwise, there is no concern over wheat availability this year,” said Navneet Chitlangia, director of Roller Flour Millers Federation of India. “Arrivals also slumped due to wet weather conditions in the past few days.”

Wheat arrivals in mandis across the country during 22 May to 28 May were 568,000 tonnes, 30% lower than the same period last year.

“Farmers in Uttar Pradesh, Bihar and Rajasthan are unwilling to sell their produce to traders and millers below ₹2,400 a quintal, excluding mandi tax,” Chitlangia added. “If the government tries hard, it will be able to procure maximum of 26.5 MT of wheat, not beyond that, which will be sufficient for its public distribution system and market interventions if wheat prices keep rising.”

Wheat has traditionally been a staple in the Indian diet, accounting for 37% of the cereals consumed. It has played a vital role in ensuring both food security and nutrition security in the country.

The government in its third advance estimates said that wheat production in the 2022-23 (July-June) crop year would be 112.7 MT against the previous year’s estimated production of 107.7 MT.

Tags: Grains, wheat, India, procurement, Market, Food Corp of India, FCI, prices, estimate