Centre Extends Wheat Procurement Date

In what could be a breather for farmers who are harvesting wheat, the central government has asked wheat-producing states and UTs to continue procurement till the end of the month.

The Ministry of Food & Public Distribution and Consumer Affairs has also directed Food Corporation of India (FCI) to continue with wheat procurement under the central pool.

The decision comes in the wake of requests by state governments and UTs to continue the procurement process.

Meanwhile, the procurement of wheat under central pool is progressing smoothly in Rabi Marketing Season 2022-23  in the States and UTs of Madhya Pradesh, Haryana, Punjab, Uttar Pradesh, Uttarakhand, Himachal Pradesh, J-K, Gujarat, Bihar, and Rajasthan.

The Central government had on May 13, 2022 decided to restrict export wheat to rein in high prices, except in case of irrevocable letter of credit and requests from neighbouring and food-deficit countries. 

Upto May 14, a quantity of 180 Lakh Metric Tonnes (LMT) of wheat has been procured, benefiting about 16.83 lakh farmers with Minimum Support Prices (MSP) value of  INR 36,208 crore.

The government has also relaxed the Fair Average Quality (FAQ) of shrivelled and broken grains upto 18 per cent without any value cut and allowed FCI to procure wheat in Punjab, Haryana including UT of Chandigarh for central pool. This decision will reduce the hardship of farmers and avoid distress sale of wheat.

The decision came after the state government of Punjab and Haryana wrote to the Department of Food and Public Distribution (DFPD) seeking relaxation in Uniform Specifications of Wheat for RMS 2022-23. 

Central teams were deputed to Punjab and Haryana during April – May 2022 to collect very large size samples from the Mandis and these were analysed in FCI labs.  The results indicated presence of shrivelled and broken grains in varying percentages and beyond FAQ norms.

The emergence of shrivelled grains is a natural phenomenon appearing as a result of extreme heatwave that enveloped the northern part of the country in the month of March.

During the RMS 2021-22, wheat production was 1095 LMT and procurement was 433 LMT.  During RMS 2022-23, wheat production was estimated at 1113 LMT. But early onset of Summer resulted in shrivelled grains and resultant drop in yield per acre in Punjab and Haryana.  The all-India procurement target has been revised to 195 LMT of wheat.

What Is Wheat Procurement?

The Centre procures wheat by paying the Minimum Support Price (MSP) announced for the crop while states do it under two systems— the centralised one, also called non-decentralised procurement system (non-DCP) and the decentralised one, also called DCP.

Why The Government Banned Export Of Wheat?

The central government has banned the export of the wheat to control the price which has been soared up to 29.49 per cent. The decision came to strengthen the food security in India and countries facing a deficit.

Since the beginning of the Russia-Ukraine war, global wheat prices have so far increased over 40 per cent. Before the war, Ukraine and Russia accounted for a third of global wheat and barley exports. Wheat from other countries was selling as high as USD 420-480 per tonne.

Food Secretary Sudhanshu Pandey has said retail prices of wheat and wheat flour in India have risen in the past year by up to 19 per cent, and the government’s decision to ban wheat export is expected to cool down the domestic prices in a week or so.

He said the decision will definitely help in softening the prices. However, it will not be possible to predict how much prices will fall.