MP may scale down wheat procurement target

In view of the large number of cases of damaged crop arrival at procurement centers, wheat procurement is unlikely to reach the target of 10 million metric ton this year. State government, if highly-placed sources are believed, will scale down its procurement target this year. Wheat procurement season has started from 25th of the previous month and will last till mid-May.

"Central government has allowed the state government to procure even damaged, shriveled and broken wheat up to an extent of 40% but procurement would not reach more than 7 million metric ton this year against targeted 10 million metric ton," a highly-placed government official told Business Standard.

Buoyed up with the combined highest growth in agriculture and allied sector during the past three years Madhya Pradesh government had expected 20 million metric ton of wheat production this rabi season from an acreage of 58 lakh hectare. But unseasonal rains and hailstorms has destroyed crop in approximately five lakh hectare of an official value of Rs 2163 crore. A fresh spell of rains at isolated place has also dampened the speed of wheat arrival at mandis.

"Anticipating low arrival of good quality wheat at mandis and government procurement centers, state government also exempted private traders who have turnover up to Rs 300 crore from purchase tax on wheat. This would boost private players to buy state wheat to a certain extent," the official said adding, "however this would may go up to one million ton. Also carry over stock of the previous year is nearly 800,000 lakh ton and hence there is sufficient wheat for public distribution system (PDS)."

The state wheat is also supplied to Maharasthra, Gujarat and Karnataka for distribution in PDS while state's own requirement under PDS stands at 2.5 to 2.8 million metric ton.

Private companies like ITC, Cargill, Unilever, etc, buy 'Sharbati' variety (also known as Sujata) of wheat to make chakki fresh atta. Years ago previous state government had allowed them to procure wheat directly from farmers on payment of mandi fee in lump-sum. Yet, the last five years have witnessed a lukewarm response from big private players though Sharbati variety wheat has high demand in various parts of the country. Also 'Durum' variety of the state is also popular among exporters who export the commodity to those countries who make 'Pasta' at industrial scale.

Wheat prices stood at Rs 1000-2290 per quintal (LOK-1 variety), Rs 1225-3100 (Sujata or Sharbati variety) and Rs 900-1681 per quintal (normal variety) at various mandis.