With private players aggressively buying wheat directly from farmers, the Government today revised its procurement target downward by 25 per cent to 33 million tonne for the 2013-14 marketing year, which will help the Centre save about Rs 3,000 crore.
In view of the higher output, the Government had pegged wheat procurement at a record 44.12 mt in the current marketing year that started in April, as against 38.1 mt last year.
“The procurement target has been revised downward to 33 mt for this year due to active buying by private players in States such as Madhya Pradesh and Uttar Pradesh,” a senior Food Ministry official told PTI.
According to the revised estimate, the Government is expected buy 11 mt in Punjab, 7 mt in Haryana, 9 mt in Madhya Pradesh, 3 mt in Uttar Pradesh and 2.5 mt in Bihar this year.
The expected drop in wheat procurement will reduce the burden on storage and help the Government save about Rs 3,000 crore, thereby bringing down the overall Food Subsidy Bill, the official said.
The reasons for lower procurement, the official said unlike in previous years, private players such as roller millers have stepped up their wheat buying directly from farmers because they have realised from the last few years’ experience that they would not get cheaper grain under the Government’s open market sale scheme (OMSS) later.
Last year, the Food Ministry did not give in to millers’ demand for a lower price under OMSS for bulk users. “That is the reason why they are resorting to aggressively buying directly from farmers this time,” the official said.
Lower procurement is expected also because traders are buying more wheat to meet the export demand, while some big farmers are seen holding stock anticipating higher prices after the harvesting season, he said.
That apart, FCI has emphasised upon the State agencies to enforce quality standards keeping in view the requirement of stocks for export purposes.
According to FCI data, the Government has so far procured over 20 mt of wheat at the minimum support price of Rs 1,350 per quintal.
Although the procurement is expected to be lower than the last year, the quantity is sufficient to maintain the Government’s buffer stock and fulfil the demand from the PDS and other welfare schemes, the official said.
As on April 1, the State-run Food Corporation of India (FCI) had 24.2 mt of wheat. This year’s estimated procurement would take the wheat in FCI godowns to 57.2 mt.