Wheat stocks exhausted; India may import the grain
the maladies of India's wheat economy were laid bare on June 09, 2005, by Union ministry of consumer affairs and public distribution (mcapd) food secretary S K Tuteja, who confirmed that the country "would not hesitate to import wheat" to sustain its public distribution system (pds) and buffer stock needs. This transition from being a major wheat exporter for four years (2000-01 to 2003-04) has baffled experts. While an immediate slump in wheat stock might not be a big problem, more disquieting is the enduring trend of declining rate of production and improper procurement management.
The total quantity of wheat procured by July 1, 2005 is estimated to be 14.8 million tonnes (mt), a senior mcapd official says. The opening stock position of wheat in government godowns this year was a poor 4.06 mt . After deducting from this central pool (14.8 + 4.06 mt) the average monthly wheat offtake, it is estimated that the net stock on July 1, 2005 will just touch the buffer mark of 14.34 mt . Considering that a good quantity will be used up in the government's food-for-work programmes and its proposed employment guarantee scheme, this stock position could threaten national food security.
The Union ministry of agriculture blames the crisis on the poor production, estimated at 73.5 mt, this year. But there has been a constant decline in wheat's compound annual production rate since 1990s: from an average rate of 3.57 per cent in 1980s to 2.11 per cent in 1990s and below 1 per cent in the present decade. S Nagarajan, director, Indian Agricultural Research Institute, New Delhi, blames a dreaded fungal disease, brown rust, for destroying the crop in Punjab this year. Also, he says, the low moisture content of the grains could have caused a considerable weight loss.
A senior mcapd official says low production fears have already prompted the industry to procure an extra one mt this year. The existence of a hoarding nexus of traders and distributors is suspected. The import whistle was blown by the chairperson and managing director of food behemoth Cargill India. The speculations led the price to top Rs 7,500 per tonne, almost 30 per cent higher than the June 2004 price. With the monsoon unpredictable and the peak demand season due in December, India may be placed in a tight spot.
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