Expectedly, third-year wheat procurement will fall short of the goal

The Government of India is likely to miss its objective for the procurement of wheat for the third year in a row. The farmers won’t sell their huge crop of wheat to the government agency, even in places where certain governments provide bonuses beyond the minimum support price.

By May 16, 2024, the government’s procurement agencies had bought 257 LMT against the objective of 372 Lakh Metric Tonnes (LMT), which is less than 70% of the target and somewhat less than the previous year.

By the end of May, we anticipate completing our purchase in the range of 267–268 LMT, according to Food Corporation of India (FCI) chief managing director Ashok K. Meena.

The Center has extended the deadline for procurement to May 31 in light of the reduced volume of work. Wheat procurement was due to conclude on May 10 in Rajasthan and May 15 in Uttar Pradesh, Madhya Pradesh, Gujarat, Himachal Pradesh, and Bihar, according to the timetable.

Given that the FCI has failed to meet its procurement goal for the last two years, this year’s purchases are crucial to the nation’s food security. India’s buffer stock fell to a seven-year low in April. The wheat buffer supply was slightly over the necessary amount on April 1st, at 76 LMT.

Under its flagship National Food Security Scheme, India needs 184 LMT of wheat per year to feed 80 crore people for free.

In the meanwhile, the government established a goal to purchase 440 LMT in 2022–2023, but it was only able to do so for around 42% of that amount, or 187 LMT. In addition, the government only purchased 262 LMT of the 341 LMT it had planned to purchase in 2023–2024.

The government restricted dealers, processors, and stockists from entering the wheat market until May 31 in order to aggressively buy wheat in order to maintain its buffer supply. In addition, in order to prevent private investors from hoarding, the government set a cap on the amount of shares they could own.

This time, reports claim, the internal objective was established at around 310–320 LMT. According to a senior official, “But the enthusiasm with which the Uttar Pradesh government has contributed record wheat to the Central pool has increased our target.”

“UP made a little over 2 LMT contribution last year. They demonstrated their dedication by providing an astounding 60 LMT this year. UP has only supplied 8.6 LMT so far,” he said.

Punjab is now at the top of the list, followed by Madhya Pradesh and Haryana. It is concerning how much Madhya Pradesh is contributing. MP fell more than 12% short of its declared goal the previous year. This year, MP has fallen far short of its goal by more than 40%.

The government now pays Rs 2275 for each quintal. The governments of Rajasthan and Madhya Pradesh have been giving out an extra Rs 125 for every quintal bonus, or almost Rs 2,400.

According to experts, farmers have stored up on wheat in anticipation of a spike in wheat prices in the next months.