Govt might have to pick rice over wheat if it extends free food grain plan

India set to have 38.6 million tonnes of rice in its reserves-much more than what it requires.

The government might have to pick rice over wheat, if it continues the free food grains distribution scheme beyond September 30, 2022. India’s rice stockpiles are more than required, but wheat inventories will be just near the buffer levels by end of Fy-23, trade and market sources.

Officially, though, food secretary Sudhanshu Pandey refused to get into the debate at a press conference on Wednesday, saying that he can’t comment on a hypothetical situation.

Earlier, NITI Aayog member Ramesh Chand in an interview with Business Standard a few days back too said that the question whether PMGKAY will be extended beyond September 2022 is speculative.

“When PMGKAY was last extended for six months in April 2022 for six months, many people wondered why it was done as there are no elections around. But, the government did it as it felt that support was needed as the economy was on the mend. So there is a lot of thought that goes into PMGKAY and the government does not take decisions in a hurry,” Chand said.

According to the food ministry’s latest assessment, as on March 31, 2023, India should be left with around 38.6 million tonnes of rice in the central pool based on the current demand and supply matrix.

This will be significantly higher than the 13.6 million tonnes required for buffer and strategic reserve.

Therefore, even if 4 million tonnes is drawn down from the stocks for PMGKAY every month after September 2022 onwards, it should still leave more than 13.6 million tonnes of rice in the buffer by the end of Fy-23.

The new procurement season for rice will start from October 2022, adding to inventories.

The only problem in distributing only rice under the PMGKAY is that every part of the country does not have a rice-eating tradition: like North Indian states of Punjab and Rajasthan.

In the latest round of readjustment of rice and wheat mix under the PMGKAY, the Centre has decided to distribute 5.5 million tonnes of rice in place of wheat in the next five months starting from May.

This according to the officials has been done to meet demand from several states that have been sitting on rice stocks and wanted it to be distributed under PMGKAY for free instead of wheat.

But, the fact also is the government might be looking to save some wheat for future needs as both production and procurement of wheat in 2022-23 is likely to drop.

Production of wheat in 2022-23 is expected to drop by almost 6 per cent to 105 million tonnes as against an earlier estimate of 111.3 million tonnes, while procurement is projected to fall by more than half to 19.5 million tonnes as against a target of 44.4 million tonnes.

Government officials said that in around 25 states of the country, there has been no change in the rice and wheat mix under PMGKAY for May to September as per the recent decision, and the ratio has been altered only in remaining main among them are UP, West Bengal, Tamil Nadu etc.

The Centre is expected to bear an additional burden of Rs 4800 crore by this decision to provide more rice than wheat as the economy cost (procurement+storage+other charges) of the former is more than wheat, officials said.