NEW DELHI: Alarm bells are ringing in the Krishni Bhavan as the shortfall in the procurement target of wheat turns out to be a grim reality with the government’s ploy to lure farmers to sell the golden grain to the Central pool having made no impact.

After the initial good response raising the expectations the low procurement trend in wheat has set in causing serious anxiety whether the Food Corporation of India (FCI) will be able to maintain a safe buffer to meet the increasing demand of the Public Distribution System (PDS) and contain the prices which are running high at a time when the demand supply gap is the lowest At the current reckoning the price Situation in the lean season may run amok if sufficient amount of wheat is not imported.

Even as the food ministers flip flop on the controversial wheat import issue continues the government may have no alternative but to import not one million but about four million tons of wheat to keep the PDS going and check the prices.

Two consecutive seasons of low procurement is considered fraught with dangerous prospects on the food front. Last year the procurement of wheat fell to 7.75 million tons from 11.07 million tons during the previous year. And the current procurement season is likely to be even worse despite good crop production.

The Narasimha Rao government which is aware of the dangerous political fallout of the food grain shortage of 10 million tons during the current year made worse by poor wheat procurement and prediction of poor monsoon is resorting to a policy of carrot and stick to coax the farmers to sell their produce to the FCI and other agencies but without meeting any success. The Punjab farmers are not much impressed with Rs.280 per quintal price being offered for wheat when the open market prices are much higher. Their demand for raising the support prices to a minimum Rs.350 per quintal is based on the last year trends when the wheat prices touched Rs.45, 0525 figure.

In the light of high market prices the farmers have vociferously protested against the support price being fixed at Rs.250 per quintal with Rs.25 additional bonus announced later In fact for the past few years the differences between the highest open market prices and the procurement prices have been steadily increasing. While the gap in the year 1990-91 was Rs. 120 it increased to Rs203 in 1991-92.

If the incentives in the form of bonus of Rs.25 per quintal offered by the FCI and Rs.5 by the Punjab government have failed to produce results so has the threat by the Center to Punjab Haryana and UP major producing states to cut wheat allotments from the Central pool for the PDS if they fail to procure the required amount in proportion to the projected production.

The shortfall in wheat procurement in Punjab has raised a specter of a long summer of discontent as the stock position in the Center pool has reached a precariously low level. Out of the total 10 million tons of buffer of wheat required to keep the PDS going and to contain the prices Punjab alone accounts for 6 million tons contribution followed by 2 million tons by Haryana.

The Union Minister, Minister of Food Tarun Gogoi has admitted the procurement being affected by the Bharatiya Kisan Union stir blocking the arrival of wheat in the major mandis of Punjab in the first week of May.

In view of the BKU stir and price factor the Center has slashed the target of procurement from the Original 65 lakh tons to 55 lakhs tons in Punjab. But that too seems to be a far cry as on May 14 the Procurement stood at 34.36 lakh tons against 46.60 lakh tons procured last year in the corresponding period.

The procurement has been hit in the two major states of Punjab and Haryana not only on account of the stir by the Bharatiya Kisan.

Union blocking the movement of wheat to mandis but the allure of getting high prices later has strengthened the trader big farmer nexus. Since the last season the phenomena of proxy buying of wheat by traders seems to be getting institutionalized.

Article extracted from this publication >> May 29, 1992