Data on Central Foodgrains Procurement Portal reveals serious issue: government bans wheat exports to boost purchases
New Delhi, Dt
Government procurement of wheat did not even reach the revised target during the Ravi marketing season as expected. According to data available on the Central Foodgrains Procurement Portal (CFPP), less than 1.5 million tonnes of wheat has been procured this season. While the government’s revised target was 12 lakh tonnes. Wheat stocks in Central Pool hit a three-year low in May due to low purchases. According to a report by the Food Corporation of India (FCI), the stock of wheat in May this year was 206.5 lakh tonnes. Less than this, in May, the stock was recorded at 3.41 lakh tonnes in 2016. The government had on May 12 imposed a ban on wheat exports to boost procurement. At that time it was believed that farmers would come to the mandis to sell their produce but this did not happen. By the time export was banned, the government had procured 12.5 lakh tonnes of wheat. According to the latest data, 3 lakh tonnes of wheat has been procured so far since the ban. Considering the procurement of 3 lakh tonnes of wheat last year, the central government had set a target of procuring 3 lakh tonnes of wheat this year. However, after researching it, the target was reduced to less than half, to 1.5 million tonnes. This year, 12.5 lakh farmers have sold wheat for the central pool. Out of this, Rs 4,12.5 crore has been paid to 14.12 lakh farmers so far. There are two main reasons behind the decline in wheat procurement. First, the ongoing war between Russia and Ukraine has reduced the supply of wheat in the international market and pushed up prices. Initially, India also saw a boom in wheat exports and the government was pushing for it. However, since March, it has been reported that the wheat crop has shrunk due to damage to the wheat crop due to rising temperatures. This was especially the case in the northern states where total production declined. To boost purchases, the government relaxed the rules on May 16 and announced that as many as 15 per cent of the shrunk grains would be accepted without any price cuts. However, there was no increase in purchases. Farmers in Punjab and Uttar Pradesh reported a 15 to 20 per cent decline in production. In those circumstances, the government had to ban the export of wheat to keep the availability of wheat in the country stable. However, the government has not yet significantly reduced its wheat production estimates. Earlier, the production of wheat was estimated at 11.12 million tonnes which has been reduced to 10.3 million tonnes. In the year 2020-21, 102 million tons of wheat was produced. According to the CFPP, despite the export ban, wheat has been procured from Punjab insignificantly. Despite extending the deadline, the procurement figure from Punjab could not reach even 3 lakh tonnes. Other major producing states like Madhya Pradesh, Haryana and Uttar Pradesh have also seen very low purchases despite the ban on exports. According to experts, another reason behind the decline in purchases may be that farmers are reluctant to sell their produce in the hope of getting better prices in the future. If this is the case, there are indications that wheat prices are likely to fall sharply in the coming days.
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