The government’s scheme to increase availability of grain in the open market for bulk and retail consumers has got a poor response. Of the 4.08 million tonnes (mt) wheat allocated for the October 2009-March 2010 period, only 1.54 mt (38 per cent) has been lifted. Similarly, 447,000 tonnes rice has been lifted compared with the allocation of 1 mt. The government is likely to stop the wheat sale scheme from April 1 in states procuring the commodity.
“The scheme is scheduled to lapse from April 1. However, the food ministry may extend it. However, the extension is likely only for non-wheat-procuring states as we want to avoid recycling of old wheat when we begin procurement in April,” said an official of the Food Corporation of India (FCI), the government’s grain procurement and distribution agency.
Of the 2.081 mt wheat allocated for bulk buyers for the six-month period, only 1.174 mt, or 56 per cent, has been approved for sale by FCI. In case of retail allocation (meant for distribution by state governments through their agencies) of 2 mt, only 372,000 tonnes, or 18.6 per cent, has been sold. Similarly, in case of 1 mt rice allotted for retail sale, only 447,000 tonnes has been lifted.
FCI officials say lifting of wheat will be even lower in March as new wheat arrivals are picking up and bulk consumers will wait for a decline in prices.
The government decided to go for an open market sale to bring down domestic food prices, which have been rising due to a demand-supply mismatch and the worst monsoon in 37 years that affected the kharif crop output. The supplies have helped keep prices stable.
“The response has been satisfactory in case of bulk allocations. However, in case of retail sale, where state governments need to ensure lifting and sell it through their shops, the response has been very poor. Most states do not have the infrastructure,” the official added.
The reserve price of wheat meant for bulk buyers is in the range of Rs 1,240 a quintal (for Chandigarh, Punjab and Haryana) to Rs 1,640 (for Port Blair). However, the price of wheat for retail sale has been kept lower in the range of Rs 1,100 a quintal (Chandigarh, Punjab and Haryana) to Rs 1,500 (Port Blair). State government agencies procure this wheat from FCI and market it to retail consumers at a margin not exceeding Rs 2 a kg. The price of rice only meant for retail sale is Rs 1,495 a quintal for common grade and Rs 1,540 a quintal for Grade A variety across all states.
