UP facing storage blues on record wheat procurement

Almost 25 lakh tonnes of wheat has been procured, breaking the previous record of 24.46 lakh tonnes in 2001. The procurement would continue till June 30. While the total storage capacity with FCI and other state agencies is around 25 lakh tonnes, effective capacity available for use is only around 18 lakh tonnes. These agencies are weighing various options for safe storage of the foodgrain.

Currently, FCI is in talks with State Warehousing Corporation (SWC) and Central Warehousing Corporation (CWC) for hiring storage space. It is also raising its own storage capacity. Some part of the procured grain, lying in the open, is being covered with polythene sheet, while more silo facilities are being readied, FCI sources said.

According to a state food and civil supplies official, private warehousing facilities may also be hired for the purpose. Of the combined procurement target of 25 lakh tonnes this year, state procurement agencies have a target of 15 lakh tonnes. For FCI, the initial target was 5 lakh tonnes and was later revised to 10 lakh tonnes in the backdrop of robust procurement. The state agencies have already gone beyond their target to almost 17 lakh tonnes.

Again, FCI plans to send about 2.75 lakh tonnes of wheat to other states by month-end, in the process releasing capacity for fresh arrivals. Some stock is routinely being released to Public Distribution System (PDS) and other welfare schemes such as Mid-day meal and Antyodaya. This year the state government has engaged societies and sub-agents to procure wheat at a commission of 2.5 per cent on a minimum support price (MSP) of Rs 1,000 per quintal, leading to record procurement.

Further, the recently promulgated stock limit order has brought the open market price almost at par with the MSP, which is encouraging farmers to sell their produce to government agencies. Traders have been agitating against the stock limit order. Last year, wheat procurement in the state was a meagre 5.45 lakh tonnes due to a delayed start and low MSP (Rs 850 per quintal).

Of the total 4,843 procurement centres, state agencies, including the food marketing department, Provincial Cooperative Federation, UP Agro, UP Sahkari Sangh, UP State Food Corporation and Nafed, owned a majority at 3,865.