UP govt suspends wheat procurement

UP has decided to call off wheat procurement in view of little or no response of the farmers on account of there being a difference in minimum support price and the ruling price in the open market.

Against the target of 2.5 million tonnes for the current rabi season, the procurement so far has been 38,854 tonnes. Private companies, with the licence by the UP government to purchase directly from farmers, managed to procure close to 1 million tonnes.

Food Commissioner Anoop Pandey, however said, "There is a definite declining trend in purchase by the six agencies of the state government and the FCI, final decision on closing the procurement operation is pending with the government''.

The state government has set up as many as 4,670 procurement centers across the state for purchasing the wheat from the farmers at MSP of Rs 650 per quintal and a bonus of Rs 50 per quintal. In several districts the district magistrates offered arms licence for DBBL guns and revolvers to the farmers selling their wheat to government agencies, but this too failed to attract farmers. The bonus of Rs 50 per quintal along with the MSP of Rs 650 per quintal, failed to make any impact as the market price ruled at Rs 800-900 per quintal.

Moreover the implementation of government orders for the bonus was delayed and was enforced only at the end of first week of May.

Though the wheat procurement operations had begun before schedule in March last, so far the total purchase by the state and central agency FCI is paltry 38,854 million tonnes (mt) against the target of 25 lakh mt. This figure includes 3,855 purchased by the FCI for the central pool. In the last Rabi season 2004-05, the procurement was 4.68 lakh mt against the target of 25 lakh mt.

Official sources cite the fall in overall wheat production die to the vagaries of whether and free run given to the MNCs given by the state government in its bid to attract the private capital in agriculture and food processing industry.

As per the estimates of the state agriculture department, against the target of 30 mt, the production of the wheat was close to 24 mt during the current 2005-06 Rabi season.

Contrary to the dismal record of the official procurement agencies the private companies including Australian Wheat Board, ITC, Cargill, managed to purchase close to 10 lakh mt from the farmers.

The UP government in a bid to strengthen the hands of the official wheat procurement agencies cancelled the licence given to five private companies on April 29. The move, however, failed to jack up the purchase of wheat by the official procurement agencies.

Interestingly all the private companies had hired the godowns owned by the government agencies including the UP Warehousing Corporation and Pradesh Cooperative Federation.