Wheat buys by govt agencies in UP surge

The arrival of wheat in mandis and procurement of wheat by the official agencies have surged significantly with newly-elected Chief Minister Mayawati placing a check on purchase of wheat by private firms.

Encouraged by the surge in procurement, the Centre has extended the Rs 100/quintal bonus on wheat for 15 days till June 30.

Mayawati responded to a call from the Centre and ordered a crackdown on the purchase of wheat by the private companies. With the check on the purchase by the private companies, the price of wheat in the open market crashed and came to the level of MSP announced by the Centre.

The new government, in its very first cabinet meeting, allowed the state agencies to buy wheat from the Arathiyas (wholesale dealers). These dealers were now buying wheat for the official agencies at a price higher than the market price.

Against the target of 15 lakh MT fixed by the UP government, the procurement of wheat by its four agencies and FCI was a paltry 50,000 MT till the end of April.

The state food department sources said with the positive change in the situation, the procurement is likely to be five to six lakh MT. So far the state agencies have purchased close to 4 lakh MT from the farmers.

Earlier, during the regime of Mulayam Singh Yadav, the efforts of the Centre to persuade UP government to play a proactive role in procurement proved futile.

A senior FCI official here said that during the elections, the UP administration took undue advantage of the situation and steadfastly refused to cooperate in procurement operations despite repeated reminders.

The FCI sources alleged that far from majors such as ITC and Cargill, the buyers were actually the small traders and arathias who entered into an "understanding" with the local administration to prevent sale to FCI.

The food ministry had fixed an unofficial target of 151.5 lakh MT for wheat procurement, of which UP was expected to contribute 15 lakh MT.

The assembly elections deploying most of the staff of the procurement agencies on poll duty coupled with open connivance of the UP State Agriculture Marketing Board with the private companies were the main hinderances in meeting the procurement target.

For the first time in UP, private companies purchased wheat directly from the farmers bypassing the statutory obligation of making the purchases from the Mandis run by the agriculture marketing board.

The private companies not only indulged in evasion of several crores of mandi fee but also derailed the wheat procurement by the official agencies of the UP government and the Centre.

A team sent by the Centre to find the causes for the low arrival of wheat in mandis found that the private companies were buying directly from the farmers without obtaining licence from the state government.

The companies and traders not only openly bought the wheat but also sent it outside the state via rail and road route with any check or hindrance by any state government agency.

In a bid to improve the procurement, the Union food ministry allowed the state government to buy wheat from the Arathaiya (wholesale dealers).

The previous Samajwadi Party government sabotaged that citing the model code of conduct enforced by the Election Commission due to assembly elections. The orders were issued in last days of April, only for two agencies of the state government.