The Hindu Business Line : Wheat, rice procurement may hit record high

Wheat procurement for the Central pool has hit a seven-year high in the ongoing 2008-09 rabi marketing season (April-March) and could well surpass the all-time record of 206.30 lakh tonnes (lt) achieved in 2001-02.

As on Friday, Food Corporation of India (FCI) and State agencies had procured 195.58 lt and with daily purchases still in the region of 2.5 lt, there is every possibility of the 2001-02 record being broken this time. This is in contrast to the dismal 111.28 lt and 92.26 levels of the preceding two years, with the latter, in fact, being the lowest ever since the 81.57 lt level of 1996-97.

Measures

A significant reason behind the turnaround this year has been the conscious efforts by both the Centre as well as the State Governments to make purchases from outside of Punjab and Haryana. In 2007-08, out of the total 111.28 lt, over 91 per cent was accounted for by these two States (67.81 lt from Punjab and 33.50 lt from Haryana), with Uttar Pradesh (5.46 lt), Rajasthan (3.83 lt), Madhya Pradesh (0.57 lt) and Bihar (0.08 lt) contributing relatively smaller quantities.

But this time, the Government agencies have so far mopped up unprecedented levels of wheat from Madhya Pradesh (16.04 lt), Rajasthan (8.14 lt), Gujarat (2.56 lt) and even Bihar (1.23 lt). Uttar Pradesh, too, has witnessed a 236 per cent jump in cumulative procurement (18.32 lt), even as Punjab (97.02 lt) and Haryana (51.63 lt) have provided an extra 47.34 lt over last year.

Other States

The States outside of Punjab and Haryana have all put together contributed an additional 37 lt to the Central pool this year. An enabling factor here was the high minimum support price of Rs 1,000 per quintal offered by the Centre, with States such as Madhya Pradesh even offering an extra Rs 100. The high support prices, in conjunction with stringent stock-and-purchase declaration norms imposed by the Centre, deterred corporates from making large-scale buys this time and leaving field open for the Government agencies.

MNCs, corporates

In 2007-08, multinationals and corporate houses reported total wheat purchases of 24.62 lt, of which Madhya Pradesh (8.50 lt), Uttar Pradesh (4.69 lt), Delhi (3.21 lt), Rajasthan (2.27 lt) and Gujarat (2.02 lt) accounted for the bulk.

Unlike in the case of FCI and State agencies, the big private players sourced just eight per cent of their wheat from Punjab (0.76 lt) and Haryana (1.29).

In the current season, procurement by companies has dipped by 86 per cent to a mere 3.37 lt, including 0.69 lt from Gujarat, 0.21 lt from Madhya Pradesh, 0.16 lt from Rajasthan and 0.15 lt from West Bengal. Not a single grain has been bought this time from Punjab, Haryana, Delhi and Uttar Pradesh.

Rice

Meanwhile procurement of rice in the current 2007-08 kharif marketing season (October-September) has touched 240.14 lt, which is more than the 220.94 lt for the corresponding period of 2006-07.

There is again every likelihood of the final procurement exceeding the record 276.56 lt of the 2005-06 season.

As on April 1, wheat stocks in the Central pool stood at 58.03 lt, against the minimum buffer norm of 40 lt for that date. The corresponding numbers for rice were 138.35 lt and 122 lt.

With sufficient quantities of wheat being bought in the new season, the overall stocks position is now comfortable, which is good news for the Centre ahead of an election year.