MSP wheat purchases up 30% at 18.37 MT
After a sluggish start because of delayed harvesting of crops, wheat procurement by the Food Corporation of India (FCI) and state government agencies has picked up pace in the last one week and crossed 18.37 million tonne (MT) on Tuesday, up 30% on year.
Sources told FE that wheat purchases from the farmers by agencies will cross 19 MT on Wednesday against the total purchase of 18.79 MT of grain in the entire last season (April-June), 2022.
The government’s wheat purchases last year fell by more than 56.6% to 18.8 MT against 43.3 MT purchased from the farmers in 2021 because of lower output due to spike in March temperature and increase in private purchase because of global demand.
Major contributors to wheat procurement so far have been Punjab (8.35 MT), Haryana (5.26 MT) and Madhya Pradesh (4.6 MT). MSP purchases in Uttar Pradesh (94,633 tonne) and Rajasthan (38,124 tonne) have been marginal.
So far the MSP operations for wheat purchase have benefited 1.85 million farmers. Against the due of Rs 38,772,188 crore to be paid to farmers for wheat purchase, the government agencies have paid Rs 23,019 crore.
“There has been some delay in payment of MSP against wheat procurement to the farmers because of the issue of imposition of value loss imposed by the food ministry under the relaxed procurement norms and some of the states have promised to pay the farmers the value loss imposed by the agencies,” a food ministry official told FE.
The government is aiming to procure 34 MT of wheat in the current season to bolster stock which has plummeted to 8.4 MT on April 1, lowest level since 2016.
Earlier this week, the government allowed the states, including Uttar Pradesh, to procure wheat through ‘panchayats’ and they will get the commission Rs 27/quintal similar to the commission paid to arthias or commission agents, societies and cooperatives.
Sources said this will accelerate wheat procurement as it would be easier for farmers to take their produce to the panchayat office in their villages rather than transporting them to designated procurement centres.
Recently, the food ministry has allowed purchase of shriveled and broken grain upto 18% from farmers with prescribed value cut against existing limit of 6% in Punjab, Haryana and Rajasthan.
The ministry on March 31 had relaxed procurement norms, by allowing purchase of grains with lustre losses above 10% from farmers in Madhya Pradesh with a marginal value cut of only Rs 5.31/quintal against the MSP of Rs 2,125/quintal for the current season.
To replenish the stock, the FCI and state agencies have to purchase at least 30 MT of wheat in this season from farmers so that sufficient quantity of grains is available for the implementation of the National Food Security Act and creation of adequate buffer stock. FCI needs to have a buffer of 27.57 MT of wheat by July 1.
The government has stated that it is hopeful of a record wheat production of 112 MT in the current crop season (July-June), while ruling out any major reduction in grain output from recent unseasonal rains in key states.
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