Wheat stocks, storage crunch give FCI sleepless nights

At a time the country is facing high food inflation, its bread basket is sitting on colossal wheat stocks. The stocks, to the tune of 12 million tonnes, lying in godowns and open spaces in Punjab are giving sleepless nights to the Food Corporation of India (FCI).

About 800,000 tonnes wheat moves out of Punjab in a month. Based on these figures, the state can clear about five million tonnes wheat by the next rabi season. This leaves a surplus of seven million tonnes.

This, experts say, may affect paddy too, as the crop cannot be stored in open plinths.

FCI sources say the state needs an estimated 7.12 million tonnes storage capacity.

FCI officials said they were not prepared for such an exigency as the situation was not that alarming two years ago. “The state had about 7.48 million tonnes surplus wheat. There was a quantum leap to 16.1 million tonnes last year. This year, it is 17.8 million tonnes,” said an FCI official.

The regular increase in the minimum support price of wheat is the main reason for the huge arrivals in the market. The Planning Commission has already asked the state government to introduce changes in the paddy-wheat cycle as the current system is said to be affecting soil and water table in the state.

Punjab has covered storage capacity (for wheat and rice combined) of 17 million tonnes and open plinth of 6.5 million tonnes. Its estimated requirement is 22 million tonnes. So, five million tonnes stocks would in any case lie in the open.

According to Planning Commission member Abhijit Sen, there is a problem of storing foodgrain, but the situation is not grave. “We are short of storage capacity, but I do not think the situation (in Punjab and Haryana) is very grave as of now,” he said.

However, there seems to be no solution to the problem in the near future as the high cost of land in the state discourages private players from offering land to FCI. Even a visit by FCI Chief Shiraj Hussain and his interactions with industry associations could not break the ice.

Economists in the region blame food procurement agencies as thousands of children stay malnourished as tonnes of wheat rots in the absence of timely distribution.

When asked about the off-take of foodgrain, sources in FCI said the corporation was an agency for procurement, storage and distribution and worked according to the guidelines of the government of India.

They added that the Ministry of Agriculture, Consumer Affairs, Food and Public Distribution decided on how to use the foodgrain procured by government agencies.