With the abysmal failure of wheat procurement in the state, the Uttar Pradesh government quietly called off the programme. The wheat procurement at 0.33 million tonnes, only 5.6 per cent of the target, fell short by around 94 per cent. The spurt in wheat prices in the open market due to export and Russia-Ukraine war led to low arrival in agriculture markets. It resulted in low procurement of wheat for the central pool under the Minimum Support Price (MSP) scheme.
As per the latest official data, about 0.33 million tonnes of wheat have been purchased by government agencies in the just-concluded 2022-23 rabi marketing season as against 5.64 million tonnes in 2020-21.
The state had set a target to procure 6 million tonnes of wheat in the 2022-23 marketing year.
Around 87,948 farmers have benefited from the procurement at the MSP of Rs 676 crore. While Rs 662 crore have been paid to farmers, there is a balance of Rs 12.86 crore. Last year, 1.30 million farmers were paid Rs 11,141 crore during the same period.
The wheat procurement exercise, which started from April 1, was scheduled to end on June 15 but the state government extended the date to June 30 in an apparent bid to raise the stock.
According to officials, the phenomenon of low procurement has been observed across the country as the prices of wheat in the open market have spiked in the aftermath of the Russia-Ukraine war.
While the government announced an MSP of Rs 2,015 per quintal for wheat, the farmers were reportedly able to sell their produce at a cost ranging from Rs 2,050 to Rs 2,200 per quintal. Apart from higher prices in the open market, the farmers were also getting instant cash payments which was a big draw as government agencies often take some time to process the payments, sources said.
State-owned Food Corporation of India (FCI) and state agencies undertake procurement at MSP to meet the requirement under the Public Distribution System (PDS) and other welfare schemes.
The low procurement forced the state government to make desperate efforts to fulfil its target, including introducing mobile centres which moved from village to village to buy wheat directly from farmers.
The Food and Civil Supplies department had set up about 5,700 such mobile procurement centres and mobile purchase centre incharges negotiated with the fair rate vendors and village heads of rural areas, following which wheat was weighed and loaded in trucks, and then sent directly to the FCI.
According to the Food department sources, the main objective of the MSP-based wheat procurement initiative was to ensure that farmers were not paid prices below MSP and there was no distress sale. “MSP is just a trigger mechanism that comes into force when prices start going down. Now that the farmers are getting better prices in the open market, our purpose is achieved,” he said. He also ruled out any adverse effect of low procurement on PDS.
According to officials, the sharp fall in the government wheat procurement was mainly due to increased private purchase for the export.
“The surge in exports and reports of a decline in production in many states due to the sudden rise in temperature have pushed mandi prices above the MSP. As a result, the farmers prefered to sell their produce directly to private players at more than the MSP and the latter are selling it to exporters,” an official said.
