FCI chairman joins hunt for wheat storage in Punjab, Haryana

Record procurement and 12 mt space needed fast; ready to raise space rentals.

With record wheat procurement expected and an existing substantial shortage of the commodity, Food Coroporation of India’s (FCI’s) new chairman, Siraj Hussain, is a concerned man.

He needs more than 11 million tonnes storage capacity in Punjab and Haryana alone and is willing to try any solution — from raising rentals for warehouses to pleading with chambers of commerce for godown space.

Wheat procurement is on in full swing in northern states. Last year, 25.4 million tonnes were procured; this year’s expectation is 26 mt. Two-thirds of this will be from Punjab and Haryana.

Hussain told Business Standard Punjab needed an additional storage capacity of 7.1 mt and Haryana another 4.1 mt. Various lesser capacity additions have to be made in other states.

Husain said there had been a lukewarm response from the private sector for creating additional storage capacities under FCI’s seven-year guarantee scheme.

“Since the requirement is the largest in Punjab and Haryana, I have been meeting the representatives of industry chambers here today to discuss with them the lacuna in the proposal of FCI. I also suggested that they hold seminars or similar events to disseminate information on various schemes of FCI to the potential partners,” he said.

He said the ceiling of (rent) of Rs 4.78 per quintal per month could be revised depending on the location of the godown to match the viability of private players. Only, most of them were not aware of it, he said. So, there was a need to improve the communication between FCI and local entrepreneurs to seek their support to enhance capacity.

FCI and other state agencies have already procured 6.16 mt from Punjab, 4.83 mt from Haryana, 072 mt from MP, 0.11 mt from UP and so forth.

The role of private players in procurement had been negligible in Punjab and Haryana, he said. This rabi season, in Punjab, just 7,300 tonnes have been procured by private parties. This figure is 1,061 tonnes in Haryana. Other states have seen much more participation. In Rajasthan, out of 2,69,000 tonnes, 1,70,000 tonnes were lifted by private companies. Similarly, in Gujarat, 1,80,000 tonnes were lifted by private players.

Husain agreed that high taxation by governments in Punjab and Haryana was responsible for the lesser offtake by private parties.

Online sale of wheat, he said, had been successful only in southern states. He said FCI had no plan to lower the price for future auctions, as it might upset private players and create disequilibrium in the market.