The Hindu Business Line : Wheat procurement tops 220 lakh tonnes

As on Friday, the Food Corporation of India (FCI) and State agencies had bought 220.23 lakh tonnes (lt) of wheat for the Central pool, as against 111.28 lt for the whole of 2007-08.

Outside traditional bowl

Significantly, of the additional 108.96 lt purchased in the current season, as much as 58.62 lt (53.80 per cent) has come from outside of Punjab and Haryana. These two traditional wheat bowl States have accounted for 68.85 per cent of cumulative procurement this year – down from 91.04 per cent in 2007-08 season and 99.44 per cent in the preceding season.

On the other hand, Uttar Pradesh (28.03 lt), Madhya Pradesh (22.66 lt) and Rajasthan (9.26 lt) have delivered record quantities. Even Gujarat and Bihar, which are not known to give much to the Central pool, have contributed 4.03 lt and 3.55 lt, respectively this time round.

The main driver for procurement levels touching all-time high levels has been the Centre’s decision to grant a minimum support price (MSP) of Rs 1,000 a quintal, as against Rs 850 a quintal for 2007-08. This, along with various restrictions on private buyers (including imposition of stringent stock-and-purchase declaration norms), has led to Government purchases exceeding the targeted 150 lt.

Crop size

The Agriculture Ministry has estimated the size of this year’s wheat crop at 76.78 million tonnes, of which the FCI and State agencies have mopped up almost 29 per cent.

Meanwhile, even on the rice front, progressive procurement during the ongoing 2007-08 marketing season (October-September) has touched 256.01 lt as on June 12. This is more than the 232.01 lt purchased in the same period of the 2006-07 season, which registered total procurement of 251.07 lt.

Buffer stocks

At this rate, the final procurement figure for 2007-08 may end up even higher than the record 276.56 lt achieved in the 2005-06 marketing season. As on April 1, wheat stocks in the Central pool stood at 58.03 lt, against the minimum buffer norm of 40 lt for that date. The corresponding numbers for rice were 138.35 lt and 122 lt.

With more than sufficient quantities of wheat in its kitty, the overall public stocks position is comfortable now. And that, in turn, has emboldened the Centre not to consider the steep MSP hikes for paddy proposed by the Commission for Agricultural Costs and Prices (CACP) in the coming season.

In its meeting on Thursday, the Union Cabinet decided to increase the MSP of the 2008-09 common paddy crop to Rs 850 a quintal from the previous year’s procurement rate of Rs 745 a quintal. The CACP had recommended a price of Rs 1,000 a quintal, which the Centre feels is not really required at this stage.

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