With procurement going apace, the wheat crisis "" man-made and government-abetted "" seems to be over. The Food Corporation of India and other state grain procurement agencies have already mopped up over one million tonnes of wheat and indications are that total procurement may be fairly satisfactory, if not up to the government's target of 12 million tonnes. Open market prices in the producing states have dropped down to the minimum support price level of Rs 475 a quintal though better quality grains are still being picked up by the traders at higher prices for despatching to consumption centres in Maharashtra and southern states. With production prospects fairly encouraging, there seems no reason for any shortage of this staple cereal in the country provided, of course, the government does not repeat the mistakes it committed last year, which triggered off the crisis.
Though a three million-tonne shortfall in wheat output and consequential four million-tonne fall in procurement last year was the main reason for hardening of prices, the problem was confounded by the mismanagement of the food economy. Thanks to a previous year's carryover of eight million tonnes and an estimated production of over 62 million tonnes, there indeed was no dearth of wheat in the country even last year. But the government miscalculated the situation and ordered wheat imports without waiting for indications of the next crop which had already been planted. This accentuated the fear of scarcity, leading to hoarding and further rise in prices.
The farm lobby's demand for higher wheat prices was the result of the ill-timed decision to import wheat. Otherwise, an unprecedented increase of Rs 95 a quintal (including Rs 60 bonus) in the procurement price of wheat would have satisfied the growers and they would have been glad to offer their produce to the government agencies. However, the arrival of imported wheat, with a landed cost of over Rs 800 a quintal, at a time when the local crop was ready for harvest, angered the farmers, prompting them to demand a price at par with that of the imported grains. It provided formidable ammunition to the kisan leaders to give a call for boycott of mandis and other forms of agitation. This stir essentially was not against lower procurement prices but against imports. The demand for higher prices was a consequence of that. The government once again failed to read this message and responded with counter-productive measures such as ordering further imports and putting various curbs on private trade, including stock
limits and selective credit control. All the government needed to do was to keep its cool and wait for the prices to fall in the wake of a bumper harvest. Private trade in any case withdraws from the market after making its intended purchases, leaving the field open for public agencies to pick up grains at official prices. Besides, no stir of farmers can be sustained during an agriculturally busy season like the present one. This is precisely what happened. The golden grain has started flowing to the official coffers and all is well again. Even now it is not too late for the government to learn a lesson and stop antagonising farmers due to undue panic.