Commission agents boost govt wheat buy

With record wheat procurement in Uttar Pradesh this year "" it has already crossed 2.8 million tonnes "" commission agents have raked in over Rs 5.6 crore so far.

For the first time in the state, the government announced this year a commission of 2.5 per cent on the minimum support price (MSP) of Rs 1,000 a quintal for wheat procurement.

This decision boosted the procurement activity in Punjab and Haryana, which top the country's wheat procurement figures. "Almost 80 per cent of the procurement in UP has been effected by these commission agents," Mehboob Hasan Khan, chief marketing officer , UP Food and Civil Supplies, told Business Standard. Commission agents, comprising societies and sub-agents, are likely to rake in nearly Rs 6 crore till June 30, the last date for procurement activity, he added.

"These commission agents have boosted the procurement in UP this year with their professional approach and experience," Khan said, adding that unlike last year, the government also helped by putting a ban on procurement by companies.

Wheat procurement this year has already broken the previous record of 24.46 lakh MT set in 2001. The record procurement has been putting pressure on the storage capacity of the Food Corporation of India (FCI) and other state agencies. While total installed storage capacity with FCI and the state agencies is around 25 lakh tonnes, the effective capacity is around 18 lakh tonnes. Faced with a clear issue, these agencies are using all possible options for safe grain storage.

Of the combined procurement target of 25 lakh MT this year, the state procurement agencies had a target of 15 lakh tonnes. FCI's target, which was initially 5 lakh tonnes, was later revised to 10 lakh tonnes in the backdrop of robust procurement. Some stock is routinely being dispatched for Public Distribution System (PDS) and welfare schemes like Midday Meal and Antodaya. Last year, however, the wheat procurement in UP was quite poor at 5.45 lakh tonnes due to late start of procurement and low MSP (Rs 850 per quintal).

Of the total number of 4,843 procurement centres in UP, the state agencies, including the food marketing department, Provincial Cooperative Federation, UP Agro, UP Sahkari Sangh, UP State Food Corporation and National Agricultural Cooperative Marketing Federation of India Limited (NAFED), own 3865 centres, a clear majority. Last year, wheat production in UP stood at 255 lakh MT. This year it is likely to touch 240 lakh tonnes against a target of 285 lakh tonnes. The final tally is still be collated.