Wheat procurement lags behind due to rains, may fall short by 10%

The procurement agencies have lifted 12.6 million tonne of wheat till 27 April for rabi 2015 as compared to 13.95 million tonne during the corresponding period last year

The delayed harvesting of wheat owing to unseasonal rain and hail in northern India is impacting procurement. As of Monday, procurement agencies have lifted 12.6 million tonnes of wheat, compared to 13.95 million tonnes during the corresponding period a year ago.

While wheat procurement for the current season was pegged at 30.5 million tonnes, the damage caused to the grain owing to a prolonged wet spell and hail might curtail it by 13 per cent.

According to sources in the Union food ministry, the procurement estimates have not been scaled down. However, projections based on the basis of filed reports peg procurement at 26.5 million tonnes.

This time, the duration of wheat procurement is also likely to drop from the normal 35-40 days to 25-30 days. Procurement normally commences on April 1 and lasts up to May 15; in some states, it lasts till May 30.

This year, harvesting is at least two weeks behind schedule as rain raised the grain’s moisture levels. Exposure to sunlight is the only technique available to farmers to dry the grain.

Farmers are trying to finish harvesting as soon as possible in order to avoid further damage to their crop in view of rain and thunderstorms forecast by the meteorological department in the coming days.

Despite speedy lifting of grain across various markets in Punjab and Haryana, it might take about a week to clear the stock. Any rain during this period would affect the grain lying for procurement.

In order to bridge the gap in procurement, the government is planning to outsource this task to private traders in select  states. In states such as Uttar Pradesh, Bihar, West Bengal and Assam, the procurement mechanism is not quite efficient; so, private traders can provide the service at the doorsteps of the small farmers to lift the grain. This will help eliminate middlemen, who purchase wheat from the farmers at rock-bottom prices and book fat profits.

This model was used from 2005-06 to 2007-08 and had mixed results. “We plan to fine-tune the terms and conditions to have better outcome this year with the consent of states,” said an official.

The Food Corporation of India (FCI) has pulled out of procurement in Haryana this year, as the state government accepted, the Shanta Kumar Committee’s report on restructuring the role of FCI in targeted public distribution system.

Last year, FCI procured 10 per cent of the total wheat lifted by the government agencies in Haryana.

Punjab has sought some time and the FCI is projected to lift 20 per cent of the total estimated wheat procurement in the state.

The procurement drive closes on May 15 in Haryana and Rajasthan; May 26 in Madhya Pradesh; and May 30 in Punjab. The Union food ministry might extend the dates this year on the recommendation of the state government, said an official.