Millennium Post

As pvt players step in, Govt lowers wheat procurement target by 25%

With private players aggressively buying wheat directly from farmers, the government on Tuesday revised its procurement target downward by 25 per cent to 33 million tonne (mt) for the 2013-14 marketing year, which will help the centre save about Rs 3,000 crore.

In view of higher output, government had pegged wheat procurement to be 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 like Madhya Pradesh and Uttar Pradesh,’ a senior Food Ministry official said.

As per 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 previous years, private players are directly buying wheat from farmers because they have realised from last few years' experience that they would not get the cheaper grain under government's open market sale scheme later.

Last year, the Food Ministry did not relent to millers' demand to reduce wheat price under OMSS for bulk users. ‘This resorted them to aggressively buying directly from farmers this time,’ the official said.

Lower procurement is expected also because traders are buying wheat to meet the export demand, while some big farmers are seen holding stock anticipating higher price after the harvesting season, he said.


The country's agricultural and allied product exports have increased by 11 per cent to $33.54 billion in the 2012-13 fiscal.

'India's export of agricultural and allied products have increased from $ 29.8 billion in 2011-12 to $33.54 billion in 2012-13,' Minister of State for Agriculture Tariq Anwar said in a written reply to the Lok Sabha.

Currently, global prices of wheat, rice and maize are higher as compared to last year, while prices of commodities such as cotton, edible oils and sugar are lower, he said.

Commodity prices depend on the production & demand situation and do not follow a linear path, he added.
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