Record decline in wheat procurement: Will we have enough on the plate?

The heat in March-April and the export of Indian wheat means the country will be left with fewer stocks to feed itself

By Raju Sajwan
Published: Wednesday 04 May 2022
Photo: Ravleen Kaur / CSE__

How will the Narendra Modi government arrange for wheat to be made accessible to the poor this year? That is a question staring it in the face as official procurement of the crop has been very less till now.

The government revised wheat allocation for 11 states under the Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY) May 3, 2022.

This means that Bihar, Uttar Pradesh, Tamil Nadu, Kerala, Delhi, Gujarat, Maharashtra, Madhya Pradesh, West Bengal, Uttarakhand and Jharkhand will receive nil to very little wheat till September. Meanwhile, their rice allocation has been increased.

The government had procured 16 million tonnes (MT) of wheat through May 2, according to official data. This is 30 per cent less than last year when 23 MT had been procured by April 27, 2021. The government wants to procure 44.4 MT of wheat in 2022-23.

Government procurement in Punjab through May 2 was 8.9 MT. The target for wheat procurement in Punjab this year is 13.2 MT. Haryana, which has a target of 8.5 MT, had procured 3.7 MT through May 2. Madhya Pradesh is to procure 12.9 MT and has procured only 3.4 MT till now. Uttar Pradesh is to procure 6 MT and has procured only 0.14 MT. 

Experts say there are two reasons for the reduced procurement of wheat this time. One is the high temperatures experienced in March and April when the crop was about to ripen. The other is the Russian invasion of Ukraine which has caused a global wheat shortage and caused the Centre to think of exporting the grain.

India was to produce 111.32 MT of wheat this year according to the Second Advanced Estimate of the Union Ministry of Agriculture and Farmers’ Welfare released in February this year.

The United States Department of Agriculture and the Global Agriculture Information Network had predicted in their report released on March 31, 2021 that India would consume 97 MT of wheat in 2021-22.

That would leave 14.32 MT of wheat with the country. But the heatwave of March and April upset this scheme of things. The true impact of the heatwave will be known only when the Third Advanced Estimate figures are out.

Still, Ramesh Chand, a member of the Niti Aayog has admitted in an interview to Business Standard that the heatwave would shave off 6-10 MT of wheat.

Farmers in the major wheat-producing states of Punjab and Haryana have said the heat may have reduced wheat production by as much as 30 per cent.

The other big reason for less official procurement is the buying of wheat by private traders. Union Minister for Commerce and Industry Piyush Goyal had tweeted on April 15 that the Indian farmer will now be feeding the world (in the backdrop of the spike in wheat prices due to the war in Ukraine).

The government had assured that it would ensure the export of wheat from the ports of Visakhapatnam, Kakinada and Nhava Sheva in addition to Kandla. Farmers started selling wheat to private traders after Goyal’s tweet.

What will happen?

The Indian government procures food grains to avail them to the poor at cheaper costs through the public distribution system (PDS). It also does so to ensure a minimum support price to farmers.

Lastly, government intervention in the commodity markets keeps prices under control, thus ensuring the country’s food security. Some 46 MT of wheat has been allocated under a number of government schemes in 2020-21. This includes 25.8 MT under the National Food Safety Act.

Another 20 MT of wheat has been allocated under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) as Covid relief. There was 18.9 MT of wheat in the central pool on April 1, 2022, according to the department of food and civil supplies.

Chand had said in his interview that even if the government was able to procure 20 MT, it won’t have any problems.

But according to Down To Earth’s analysis, the government should have 25 MT for PDS and 10 MT for PMGKY. By July, the government should have 57 MT of wheat. But add 20 MT and 18 MT and the government will have only 38-39 MT. How will it feed the country in that case?

This is the first in a 2-part series. Read the second part here

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