Agri Business

Centre cuts wheat allocation for 12 States under PMGKAY

Prabhudatta Mishra | Updated on: May 04, 2022
Wheat procurement until May 1 was at 16.2 mt, 43.85 per cent lower than the year-ago period

Wheat procurement until May 1 was at 16.2 mt, 43.85 per cent lower than the year-ago period | Photo Credit: -

Says shift to rice will help mitigate scarcity-like situation amid dip in wheat procurement

The Centre has revised allocation of rice and wheat for 12 States under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) by asking Uttar Pradesh, Bihar, Tamil Nadu and Kerala to shift to rice for their entire grain requirement.

For others, the reduction in the quantity of wheat will be compensated with the same amount of rice so that there is no shortage in overall grains allocation.

Saving wheat

Amid the ongoing Rabi procurement season — which has seen the lowest wheat procurement in the last 15 years — the latest move will help the government save 5.55 million tonnes (mt) of wheat under PMGKAY. Before this revision, the allocation plan for PMGKAY would have entailed an outgo of 10.93 mt at 100 per cent offtake for April-September period. After the revision, the government requires a maximum of 5.38 mt wheat, sources said. Simultaneously, rice allocation under PMGKAY has increased to 18.53 mt from pre-revised 12.99 mt.

In a letter to food secretaries of all the States on Tuesday, the Food Ministry said while there is no change in other terms and conditions of PMGKAY guidelines, the revision in allocation has been undertaken “in order to mitigate scarcity-like situation and to ensure availability of sufficient stocks as per stocking norms”.

Low procurement

Under the scheme, the Centre has been distributing free-of-cost foodgrains to 81 crore beneficiaries under the National Food Security Act (NFSA) over and above their entitlements under the law at 5 kg per person per month.

However, the continued outflow of wheat under PMGKAY had come under question as the grain procurement has dipped this season. Wheat procurement until May 1 was at 16.2 mt, 43.85 per cent lower than the year-ago period. Traders and experts have said the procurement may be around 20 mt as farmers are able to sell above the MSP of ₹2,015 per quintal in open market while official agencies buy at MSP.

It may be noted that in 2007-08, the wheat procurement was 11.13 mt, following which it kept rising almost every year to reach a record 43 mt in 2021-22.

“Since the government scheme is free of cost, there is no concern on lifting even if beneficiaries are offered rice in place of wheat. For the States, where the wheat allocation has been cut, not completely withdrawn, it is for the State government to decide how to distribute the grains. While Tamil Nadu, Kerala and Bihar may not have a problem as people consume rice, Uttar Pradesh may have some issues since in the western region the preference is for wheat,” said a source.

FCI’s letter

Pointing to the almost 50 per cent drop in arrivals, the Food Corporation of India (FCI) in a letter to the Food Ministry on April 27, had sought ‘immediate’ revision in allocation as some States were waiting to lift the grains for May. Besides, the move was necessary to maintain satisfactory level of buffer stocks so that the food inflation is kept under check, FCI had said.

The stocks with FCI as on April 1 were 18.9 mt of wheat and 55 mt of rice (including 33.9 mt in the form of unmilled paddy).

Published on May 03, 2022
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