India: Centre to buy wheat after slack procurement by states

The Union government is planning to procure more wheat in Uttar Pradesh and Bihar in the next 2024-25 rabi season after significantly lower Central purchases of the grain in these two states and Rajasthan.

In the previous rabi season, the governments of Uttar Pradesh and Bihar procured 214,981 tonnes and 589 tonnes of wheat as against a target of 3.5 million tonnes (mt) and 1 mt, respectively.

As part of the plan, the Centre’s National Agricultural Cooperative Marketing Federation of India (NAFED) will be involved in wheat procurement alongside state agencies and the Food Corporation of India (FCI), a senior official said.

“A letter has already been issued to NAFED for wheat procurement in these states at the minimum support price (MSP) and a draft action plan has been prepared and has been submitted to the concerned authority for finalisation. Upon finalization, state-wise plans will be developed,” the official said.

The Centre will analyze district-wise wheat production, its arrival in market and procurement, identify areas for targeted procurement and allocation of central or state agencies for procurement while ensuring the readiness of these agencies.

The plan aims to ensure early farmers’ registration and early start of procurement from mid-January in the districts where arrivals are early because of shifts in cropping practices owing to climate change. The government has also advised making the required logistics arrangements to ensure that the ‘fair average’ quality of wheat is procured early.

To ensure that the agencies have the requisite financial arrangement in place to pay farmers within two days, the performance of agencies engaged in procurement in previous years will be reviewed. Agencies may also provide non-financial assistance like helping farmers by facilitating their registration etc., the official added.

Queries sent to the food and public distribution department, NAFED and FCI remained unanswered at press time.

Mint on 28 May reported that the department of food and public distribution would ensure procurement of wheat in the 2023-24 rabi marketing season by taking a multi-agency procurement approach, involving NAFED, Panchayats and non-DCP (decentralised procurement scheme) other than FCI to meet the target.

In the previous season, falling market arrivals lowered the pace of wheat procurement in Rajasthan, Uttar Pradesh and Bihar.

In these states, better prices offered by traders and millers drove farmers to sell in the market rather than to the government at MSP.

In the 2023-24 rabi season, the government could purchase 26.1 mt against its estimated target of 34.1 mt. Wheat procurement typically starts in March and goes on until June.

To be sure, the government currently has 18.5 mt of wheat in the central pool, seven-year low, against the buffer norm of 13.8 mt as of 1 January.

Farmers across the country have already started cultivating wheat but up to 8 December the area under wheat was 2.2% lower on-year at 24.8 million hectares.

This is because deficient monsoon left the soil moisture levels in a precarious state, and water scarcity in many districts emerged as a significant concern. Now, however, the situation has improved.

The government has been active in keeping prices of food items in check and has taken a series of preventive measures, including open market sales, export bans, and stock holding limits on wheat.

Tags: purchases, Market, FCI, Food Corporation of India, Production, wheat, India