Against 4 million tonnes target, state likely to achieve 2 milliom tonnes
The sluggish wheat procurement process in Uttar Pradesh is likely to end only at the half-way mark as the season ends on June 30.
While UP had targeted to procure 4 Million Tonnes (mt) during this procurement season beginning April 1 through June, so far only about 1.7 mt has been purchased with less than a month to go.
Of the 4 mt target, Food Corporation of India (FCI) had the target of 100,000 tonnes, of which it had procured about 25,000 tonnes.
There are several factors leading to low procurement, including high temperature during harvest, which affected production and resulted in shrivelling of wheat, and higher prices in the open market vis-à-vis Minimum Support Price (MSP) of Rs 1,100/quintal.
“The procurement has remained sluggish this season both with FCI and the UP agencies. It is most likely that we would be able to achieve only half our combined targets,” an FCI official told Business Standard.
The current open market rate of wheat is around Rs 1,200/quintal and the farmers get cash upfront against the payment through cheque by FCI and state agencies.
Besides, the government agencies are also deducting Rs 44/quintal for shrivelled wheat, which is keeping the farmers away from them as the effective price comes to Rs 1,056/quintal.
Earlier, the state government had estimated the wheat production would exceed 29 mt, however, the revised estimates are 26 mt.
“We had fixed 4 MT as target on our preliminary assessment of the situation. Now, since open market rates are more profitable for the farmers, we are happy the farmers are getting better returns than MSP,” food and civil supplies department special secretary D K Gupta said.
He informed almost 20 mt is retained by farmers for personal consumption and rest is available for procurement. “Since, the production has also taken a beating this year, the procurement is bound to be affected.”
In its 2010-11 wheat procurement policy declared on March 30, UP had allowed private bulk purchasers to procure wheat in the state. In 2007, UP had disallowed procurement by private purchasers as it was affecting government procurement due to price differential.
This season, 4,468 procurement centres had been set up, including state food marketing department, Provincial Cooperative Federation, UP Agro, UP Sahkari Sangh, UP State Food Corporation and National Agricultural Cooperative Marketing Federation of India Limited (Nafed). FCI has set up over 40 centres. UP is India’s largest wheat producer and provides 35 per cent to India’s food basket.
