Private buyers pull down FCI wheat procurement by 22%

Purchases by govt during current season plunge to 22.9 MT

WITH the Food Corporation of India’s (FCI’s) wheat procurement during current rabi marketing season (201617) plunging by more than 22% to 22.9 million tonne (MT) from last year's level, the central agency has asked its state units to ascertain the extent of purchases by private players this season.

Food ministry sources told FE that the key reason behind the drop in procurement is private players buying wheat from farmers in Uttar Pradesh, Rajasthan and Madhya Pradesh in an aggressive manner.

“Throughout the procurement drive which began on April 1, market prices of wheat have been ruling above minimum support price (MSP) in Uttar Pradesh, Madhya Pradesh and Rajasthan,” a food ministry official said.

InRajasthan,FCIandstate government agencies, which had lifted 1.3 MT of wheat in 2015-16 season, saw procurement of only 7 lakh tonne this seasonsuggestingincreasing purchase by private players. Similarly in Uttar Pradesh, FCI and state agencies procured only 8 lakh tonne of wheat this season as against 2.2 MT purchased in the last season. “Private players have purchased close to 5 MT of wheat from mandis in Uttar Pradesh while around one MT of wheat has been purchased by private parties fromeasternregion,”theofficial said.

In case of Madhya Pradesh, the second biggest contributor to the central pool after Punjab in the last few years, procurement dipped to only 3.9 MT this year from 7.3 MT achieved in the previous year. In the state where most of the purchases by private sector players happened because of its proximity to southern and western regions, farmers have received a premium of around R100 to R250 a quintal on the MSP of R1,525 per quintal for the normal variety of wheat.

“When far mers have been able to sell their wheat to private buyers on better prices, it is natural that procurement has fallen sharply this year,” Rajesh Rajora, principal secretary (agriculture) of Madhya Pradesh, said.

On May 19, against the bufferstocknormof 24.5MT for July 1, FCI had wheat stock of 31.4 MT. Besides, the corporation has to have 3 MT of wheat as strategic reserve. In an inter-ministerial meeting chaired by Hem Pande, secretary, Department of Consumer Affairs, on Tuesday, an FCI official said that the corporation has sufficient stocks of wheat to cater to requirements of Public Distribution System (PDS) and buffer norms besides for the open markets sale operations.