The Hindu Business Line : Farmers holding back wheat

DELAYED ARRIVALS: Bagged wheat kept at the Karnal grain mandi in Punjab. Wheat arrivals are slow due to delayed harvesting and holding back of produce by farmers expecting higher prices.— Ramesh Sharma

Sangrur (Punjab) April 22 If last year it was ITC, Cargill, Glencore, Ruchi and AWB that played spoiler, this time the threat to the Centre's wheat purchase programme is seemingly coming from the farmer himself. The current rabi marketing season is seeing what is perhaps an unprecedented holding back of produce by growers in Punjab and Haryana.

"Normally, not more than 20 per cent of our farmers have the capacity to hold their crop through the year. And out of them, only half would have exercised this power last year. But this time, at least 50 per cent of farmers have decided not to bring wheat to the mandis till June or even July," said Mr Ravinder Singh Cheema, President of the Federation of Aarhtia Associations, a body representing Punjab's aarhtia (commission agent) community.

Till Friday, only 59.56 lakh tonnes (lt) had arrived in mandis across the country during the ongoing season (April-June), against 82.96 lt in the corresponding period of 2006-07. The arrivals have fallen in both Punjab (31.89 lt versus 52.75 lt) and Haryana (18.09 lt versus 23.37 lt). Lower arrivals have, in turn, translated into a dip in official procurement: from 67.89 lt to 45.83 lt for all-India, from 48.07 lt to 29.22 lt in Punjab and from 19.66 lt to16.45 lt in Haryana.

One reason for the poor arrivals — despite domestic output estimated nearly 45 lt higher than the previous year — is the manual harvesting by farmers. With straw prices soaring, farmers have found it less economical to use combines, which harvest faster but salvage less chaff relative to the conventional sickle-thresher route.

Manual harvesting, however, does not present the full picture. The real story behind low arrivals, Mr Cheema felt, lay in farmers playing the market. "Last year, farmers saw their prices rise from Rs 650 per quintal in early April to Rs 1,050 by November-December. This time, the Centre is offering Rs 850, yet they expect a repeat and rates crossing Rs 1,100. So, they are taking their own time to harvest the crop and make money from straw in the bargain," he said. Importantly, "they" include not just the 20 per cent top cream (which managed to sell at the higher prices), but also another 30 per cent farmers, who can hold on for 2-3 months. According to Mr Raj Sood, a leading aarhtia of Khanna ( the country's No. 1 grain mandi), about 24-25 lt of Punjab's wheat will not reach the mandis before July.

That may not be good news for the Centre, which is targeting to buy 150 lt plus, compared to the dismal 92.25 lt of 2006-07.

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