Wheat procurement by Government agencies is unlikely to cross 26 million tonnes (mt) in the ongoing rabi marketing season based on mandi arrival trends so far. This is not only way below the original projections of over 44 mt, but even lower than the 38 mt-plus that the Food Corporation of India (FCI) and other parastatals had mopped up last year. At one level, the less than anticipated procurement is a matter of relief. Had the original expectations of wheat purchases materialised, the FCI’s own and hired warehouses would have been overflowing with total grain stocks of nearly 95 mt as on July 1. Now, it looks like these will be contained well within 80 mt. Although that is still two-and-a-half times more than the necessary buffer-cum-strategic reserves to be maintained by the Government, the subsidy savings from having to buy and store less quantity of grain wouldn’t be small either.
But the relief on account of a reduced food subsidy burden is small compensation for a major failure on the Government’s part, which relates to its estimates of wheat production. The Agriculture Ministry had only last month reckoned the size of the current crop at 93.62 mt, marginally below last year’s record high of 94.88 mt. But official procurement turning out way below projections, and the fact that open market prices have firmed up by nearly Rs 1.5 a kg in the last one month, clearly point to a much bigger production decline than the Ministry’s estimates. An alternative theory, of farmers holding back their crop, does not hold much water for two reasons. In the first place, not many farmers have the capacity to stock up. Even if there are traders willing to hoard on their behalf, the incentive for it is quite limited, when FCI’s burgeoning inventories and lacklustre global wheat markets rule out the possibility of prices really shooting up in the coming months. At the end of the day, the conclusion of this year’s output being significantly lower than the Government’s estimates is inescapable.
What is strange in all this is that there had been regular field reports, from early January, of the crop in large areas being infested by ‘yellow rust’ fungus. Even the Directorate of Wheat Research at Karnal (Haryana) had been issuing advisories on this disease, which attacks the leaves and affects the photosynthesis process leading to shrivelled grains. The Government, it seems, ignored these warnings. Nor has it undertaken serious extension activity — in coordination with the States — to get farmers to replace wheat varieties that its own scientists had found particularly susceptible to the dreaded fungal pathogen. The country is lucky that the Government’s failure — both to come out with a correct field-based production estimate and also not take adequate precautions against what appears to have been a serious pest outbreak — may not prove very costly this time. But one cannot always count on such luck.