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The government on Wednesday conceded that wheat production will be lower than initial estimate, procurement will not touch even half of target and there is no provisioning made for open market intervention, which is normally done in case of any price rise.
However, the Centre still maintained that stocks will be in surplus. A day after revising the allocation of wheat under the free foodgrains scheme — Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), Union Food Secretary Sudhanshu Pandey said: “We will still be in surplus (as on April 1, 2023) in terms of availability after meeting the buffer norms.”
As was reported by BusinessLine a day earlier, the Food Secretary announced the revision in allocation of wheat under PMGKAY and said that 5.5 mt of additional rice has been allocated in place of wheat to States after discussing with them. The Centre has been distributing free of cost foodgrains under PMGKAY, to all 81 crore beneficiaries of the National Food Security Act, over and above their entitlements under the law at 5 kg per person per month since April 2020 following the onset of the Covid pandemic.
He said despite wheat procurement likely to be 19.5 million tonnes (mt), the stock will be 8 mt before the start of next season from April 1 which is more than the buffer norm of 7.5 mt. The government had initially expected the procurement to be about 44 mt which Pandey attributed to a situation when global prices were ruling below the minimum support price (MSP) of ₹2,015/quintal. Last year, the Centre had purchased over 43 mt.
“Private traders are buying more this year after international prices moved up, whereas farmers used to sell to government out of compulsion. Neither we are pessimistic, nor overly optimistic. If farmers get higher than MSP in the market, why will we force them to sell to the government,” he said responding to why the government is losing hope when procurement season is to continue until June 15. The government expects 2 mt more procurement in addition to current 17.5 mt, particularly from Uttar Pradesh and Madhya Pradesh which are much below expectation.
The Food Secretary also said that the agriculture ministry has revised the wheat production estimate downwards to 105 mt for the 2021-22 crop year (July-June) from 111.3 mt pegged in February. The output was 109.59 mt in 2020-21. He attributed the drop in output to early onset of summer that caused reduction in yield.
No open market sale
The government admitted that there will be no stock available for open market sale scheme (OMSS). The OMSS has been designed to keep prices under check as traders know that the government can intervene anytime if prices rise. “Only time will tell how the government will manage in case of price rise,” an expert said. The government has not issued any tender under OMSS since April fuelling speculation that the scheme has been withdrawn this year.
“Open market sale happens only when the market is dry and major stock is available with the government. Today the grain is in the market and it is open for all to buy from farmers. There is no condition that warrants any open market sale,” Pandey said.
He also clarified that there is no plan to curb wheat export and the government in fact helping exporters in providing them logistics support so that the country meets the global demand created after Russia-Ukraine war.
Export front
“We don’t see a case for any control on exports, there is no such plan (to levy any export duty). Wheat exports are on and in fact the government is facilitating the traders,” he said. New export markets such as Egypt, Turkey and some European Union countries are opening for Indian wheat, he said adding agri-export promotion body APEDA will soon take a delegation of exporters to different countries.
Pandey said that private traders have already shipped 1 mt of wheat since April out of 4 mt contracted for April-June quarter. Indian traders have a window for exports till June when the wheat crop from Argentina will arrive. Global availability is seen to increase with Argentinian supply, he said. India had exported record 7.21 mt of wheat in 2021-22 fiscal, up from 2.15 mt in 2020-21, he said.
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