The Food Corporation of India (FCI), the state-owned grain procurement agency, is confident of procuring over 15 million tonnes (mt) of wheat from farmers this rabi season, especially after total procurement jumped by almost 30% in the last four days.
Initially, there were concerns that the government may not succeed in achieving its targets as there were fears that private trade would outbid it.
The total procurement by FCI in the mandis (markets) of Punjab, Haryana, Rajasthan and Uttar Pradesh, as on Monday, was 5.88mt against 4.58mt on Thursday. Total wheat arrivals aggregated 7.45mt by Monday evening, of which 80% has been procured by the agency.
“In the last few days five-six lakh tonnes of wheat have arrived in mandis of Punjab and Haryana on a daily basis, more than 90% of which has come to the FCI,” said Alok Sinha, chairman and managing director, FCI. He also said if the same momentum continues, FCI could easily reach its target of 15mt in 15-20 days time.
On Monday, procurement in Punjab and Haryana stood at 3.96mt and 1.88mt, respectively. Smaller quantities have started flowing in from Rajasthan and UP as well. In Rajasthan total procurement so far has been 14,000 tonnes, while in UP it was 7,500 tonnes.
“We will take stock after a fortnight. We are hoping that farmers will continue selling to FCI. We may even procure upto 17mt, in which case, the country will only have to import only one million tonnes,” said the FCI chief. Last year, India imported 5.5mt of wheat.
He also added that though the harvest was late in northern India, the momentum had picked up and that FCI hoped to consistently procure over 80% of each arrival. Another FCI official, who did not wish to be identified, admitted that given the dominance of private players, such as ITC Ltd and Cargill India Pvt. Ltd in Uttar Pradesh, it is difficult for FCI to lift substantial amounts there.
According to Amit Sinha, director, Agriwatch, which is a part of Indian Agribusiness Systems Pvt. Ltd, procurement should not be a problem as the crop is good this season.
“What is important is how well FCI manages the logistics of collection and maintenance of wheat in their godowns and how well it distributes the wheat to state governments for further distribution.”
FCI buys grains from the market and sells to the poor through the public distribution system, maintains a buffer stock on behalf of the government and supplies foodgrains to social-sector programmes like mid-day meals and food-for-work programmes.
The government has raised the minimum support price to Rs850 per quintal from Rs650 last year.
The country is likely to produce 73-74mt of wheat this year, up from 69.4mt last year.