Low wheat procurement addresses FCI's storage woes

For Food Corporation of India (FCI), a drop of about 30 per cent in wheat procurement in the 2013-14 crop marketing year has come as a blessing in disguise. Earlier, the corporation had drawn flak for the tardy manner in which it handled mounting foodgrain stocks. The situation was accentuated by successive bumper procurements of wheat and rice.

Officials say the drop in procurement would enable FCI to effectively manage foodgrain stocks and ensure small quantities are left out in the open when the 2013-14 wheat procurement season ends around mid-July.

By May-end 2012-13, FCI had about 90 million tonnes (mt) of foodgrain stocks; its storage capacity was about 70 mt. This year, it is more comfortably placed. Currently, the corporation has storage capacity of 71-72 mt, including covered space and covered-area plinth. Its current foodgrain stocks are estimated at 78 mt.

Officials said the situation could have been alarming, had the government procured the estimated 44 mt of wheat this year. But thanks to strong buying by private traders, stockholding by farmers and a drop in yields in Haryana and Madhya Pradesh, now, procurement is estimated at only 26 mt, about 30 per cent lower than last year and 41 per cent less than the initial target. "Foodgrain (wheat and rice) stocks would have stood at a mind boggling 90 mt by June-end, had wheat procurement been in line with the target. This would have created a huge logistical problem. But thankfully, that is not the case anymore," said an official. He added at the end of this wheat procurement season, grain stocks unlikely to have adequate storage space were estimated at six to seven mt, which was easily manageable.

FCI's monthly wheat and rice offtake for targeted public distribution is five to six mt. Therefore, it would take just a couple of months for the excess stock to be absorbed, an official said. "Once the procurement officially stops around July 15, we are quite hopeful all excess stocks would be easily absorbed," he said. In 2012-13, about 60 mt of foodgrains were distributed through the targeted public distribution system from FCI godowns across the country.

Though production of wheat in the 2012-13 crop season has officially been estimated at 93.6 mt, just 1.34 per cent less than last year's record production, experts said the actual output was much lower - 88-90 mt.