In Madhya Pradesh, market rates for wheat soar past govt's support price

Food Corporation of India (FCI) faces stiff competition from private entities in Madhya Pradesh on wheat procurement. 

The market price is presently above the government's Minimum Support Price (MSP). This has led the government-owned entity to set up camps near major harvesting centres, to ease farmers’ transport and sale issues.

“There is neck-and-neck competition between FCI and private players in Madhya Pradesh, where procurement started a week ago. We believe only half the quantity offered by farmers has come to us,” said a senior FCI official in the state. The agency has procured about 500,000 tonnes till now.

FCI says it had procured 3.99 million tonnes of wheat from MP in the 2016-17 rabi marketing season (RMS), 17.4 per cent of the 22.96 mt from across the country. For the RMS of 2017-18, the government’s target for FCI in the state is 8.5 mt. This, the official felt, would not be achieved, with private agencies offering a higher price.

“So, we started setting up purchase centres near the major production belt. So, farmers supply to us, though we offer Rs 75-100 a quintal less, as they get timely payment. Also, farmers do not want to take a transportation risk in terms of wheat supply to the mandis (wholesale markets). They are not sure of the selling price there, as that fluctuates upon demand and supply. In case, wheat is not sold promptly in the market, they would have to pay demurrage. By selling to us, they are sure of getting the MSP,” said the official.

Data compiled by agmarknet.gov.in showed the Lokwan variety at the Indore mandi being quoted at Rs 1,650 a quintal; the MSP is 25 a quintal less. The best quality was sold at Rs 1,990 a quintal on Friday; at the Thandla mandi, it was Rs 1,710 a quintal.

FCI thinks it should be able to reach eight mt in MP and two mt (the official target is three mt) for Uttar Pradesh.