FCI faces storage problem in Haryana

The Food Corporation of India (FCI) is grappling with a glut of wheat in Haryana. The central food procurement agency, which had a wheat stock of 2.57 million tonnes on September 2007, had a stock of 4.47 million tonnes of the commodity in September 2008.

According to sources, there has been a consistent increase in the availability of wheat in the state in the last two years due to reasons like revision of minimum support price, initiatives by the state agriculture department to increase per capita productivity and the contribution by the states like Madhya Pradesh and Gujarat in the central pool of wheat.

The storage of wheat is going to become an issue if the situation continues.

According to information available at the FCI zonal office in Panchkula, as on September 2008 the state has a total storage capacity of 2.51 million tonnes (covered) and 1.95 million tonnes (open storage) and accounts to 4.47 million tonnes of the total storage capacity.

Of this, FCI has 1.66 million tonnes and the state agencies had 2.8 million tonnes storage capacity.

The FCI is worried because the indications given by the agriculture minister about the revision of minimum support price (MSP) of wheat and the state agriculture department targeting to increase per hectare productivity of wheat from 41.58 quintal per hectare in 2007-08 to 42.60 in 2008-09 would create further glut in the market.

The zonal office of FCI has decided to increase the capacity by 400,000 tonnes in the near future but that might take time. As of now, there is no plan to invite the private players for the storage of wheat as is done in case of paddy where Gujarat-based Adani group put up silos in Kaithal district for safe storage of paddy.

According to a senior official in Haryana, the government agencies cannot refuse the procurement by farmers at the MSP. Different mandis are allocated to different procurement agencies on the predecided schedule. The procurement purely depends on market forces and if the bumper wheat crop occurs the central procrement agency might find it difficult to provide safe storage to the entire wheat procured.