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Against The Grain

Bumper wheat crop poses new headaches

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Against The Grain
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Paradox Of Plenty

  • Wheat projection of 84.27 million tonnes hit mandi prices
  • Farmers await price revival; govt buys much below last year
  • Wait for eGoM on exports as global demand, prices are higher
  • Govt storage capacity already tight; fear of damage prevails
  • Food security scheme launch to raise stock requirements

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It’s been a nerve-racking week for Brijesh Singh. The 34-year-old farmer from Sitapur district in Uttar Pradesh is anxiously waiting for buyers for his 60 quintals of wheat. But, so far, there’s no government purchase centre in sight. “If a government centre doesn’t open here soon, I will be forced to sell to some agent or in the mandi at the prevailing price of Rs 1,000/quintal, far below the government-fixed MSP (minimum support price) of Rs 1,170/quintal,” says Singh.

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Paradoxically, as India rejoices at a record wheat production estimated at 84.27 million tonnes, hundreds of farmers face an uncertain future. There are several reports of farmers slowing up on the harvest and sale of wheat in expectation of prices picking up. High taxes in Punjab and Haryana have ensured few private sector purchases. In other wheat-growing states, there is that endless wait for the government to permit exports. Meanwhile, prices in the mandi have gone down by 14-19 per cent in April alone after the government’s announcement of production estimates.

Food minister K.V. Thomas is, however, happy that domestic prices are under control, unlike in global markets. This makes exports attractive. The dilemma, explains Thomas, is how best to balance domestic needs and ensure good remuneration for farmers. “Exports will be considered only after ensuring there is enough stock to implement food security requirements,” the minister says.

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On a rough calculation, the government requires 63 million tonnes of food stock if the proposed food security bill is passed and implemented by the end of 2011-12. Given the vagaries of nature, the food ministry is keen to ensure stocks for at least three years. At the same time, highly placed sources indicate that exports on a small scale, much like sugar, are likely to be greenlit when the empowered group of ministers meets in early May.

Still, a small quantity of exports isn’t going to alter the disturbing ground reality. Not only will a large majority of farmers lose out in spite of the government fixed rate, there is also every possibility that poor storage will lead to damaged stock even as millions go hungry or suffer from malnutrition. For its part, the government assures that storage is better than last year’s. “This year, our wheat purchases are likely to be 25 million tonnes as against 22 million tonnes last year,” says FCI chairman Siraj Hussain.

But it’s going to be a tall order. The harvest season began with government silos holding 44.18 million tonnes of grains against the April 1 buffer and the strategic requirement of 21.2 million tonnes. Admitting to feeling both “ecstasy and agony” after touring Haryana and Punjab, agro-scientist M.S. Swaminathan explains: “It is heartwarming to see what our farmers have accomplished with their hard work. It’s agony to find that last year’s harvest is still in gunny bags under tarpaulins in the open.”

Urging a thorough study of the internal requirements before deciding on exports, Swaminathan points to the disconcerting fact that some of the older wheat stock is now fit only for animal feed. Urging greater transparency, the farm expert calls for a calibrated decision on the quantity and quality of wheat to be permitted for overseas sale.

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While exports could ease some of the pressure on storage, Krishan Bir Chaudhary of the Bharat Krishak Samaj wonders why the government is not providing incentives for farmers to create storage capacity where there is demand. Instead, we have a scenario where companies are failing to create storage capacity despite incentives, while both farmers and poor consumers pay for the government’s piecemeal planning.

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