'Hoarding not scarcity has caused shortage'

While the government has finalised wheat imports for 3.5 million tonne, there is a likelihood that enough wheat is still lying with the Indian farmers.

The former director of Food Corporation of India (FCI), Kanhaiyalal Gidwani, has written a letter to the Union minister for consumer affairs, food and public distribution Sharad Pawar, urging the government to float a domestic wheat tender.

According to him, the big farmers in Punjab and Haryana are carrying about five million tonne of wheat with them. These farmers are anticipating a better price in the later months of the year. If the government offers to buy wheat at the existing market price, such farmers would readily sell large amounts.

It is highly probable that farmers are hoarding large volumes of wheat. While the wheat production this year declined marginally to about 70 million tonne, the procurement fell to 9.2 million tonne from 14.7 million tonne last year.

The government had set a wheat procurement target of 16 million tonne. Punjab was expected to contribute maximum wheat to the Central pool as usual with 85 lakh tonnes, followed by Haryana with 42 lakh tonnes and Uttar Pradesh with 25 lakh tonnes.

However, the reality did not meet expectations. Procurement in Punjab fell to 69.46 lakh tonne from 88 lakh tonne last year, in Haryana it fell from 45 lakh tonne to 22.29 lakh tonne and in UP from 5.6 lakh tonne to merely 47 thousand tonne. But where has all the wheat gone?

The idea that private companies such as ITC, Adani and Cargill bought all the wheat does not hold true, he stated in the letter.

The private players would not buy in excess of their requirement. Atul Chaturvedi, president of Adani Exports' Agro division, seems to agree with Gidwani.

"There is a limit to what the private players can stock. The government procurement was low as the market price ruled higher than the MSP and the affluent farmers preferred to hold stocks, which is very logical. There is no reason why any one would like to sell his produce at a lower price," said Chaturvedi.