'FCI likely to procure 15 mt wheat this season'

Q&A: Alok Sinha

Alok Sinha, chairman and managing director of Food Corporation of India (FCI), the country's grain procurement and distribution agency, talks to Ajay Modi about the upcoming wheat procurement for the rabi season and the ongoing paddy procurement for the kharif season.

Is there any target for wheat procurement?

Our objective is to ensure that the farmers don't sell below the minimum support price (MSP). We are ready to purchase any amount that comes to us at MSP.

However, based on the projections made by major wheat growing states, procurement of about 15 million tonnes looks possible.

Punjab has indicated that it will be able to contribute 9 million tonnes to the central pool while Haryana has assured a quantity of 4.5 million tonnes. Among other states, Uttar Pradesh is likely to procure 1.5 million tonnes while Rajasthan is estimated to purchase 0.5 million tonnes.

Last year, private traders actively purchased wheat at rates above the MSP and affected government's purchase. How do you see things this year?

It appears that the private agencies will not buy in such quantities as they did last year. This is mainly because they could not make profits as domestic prices remained stable and did not rise in tune with the market expectations. Wheat prices are still Rs 100 a quintal below what it was in November 2006.

What will be the wheat buffer stock as on April 1?

We estimate the buffer stock to be 5.3 million tonnes, 1.3 million tonnes higher than the buffer stock norm for the date. A higher stock with us will mean stable prices in the open market and should boost procurement.

The rice procurement in 2006-07 was about 9 per cent lower than the year before. How do you view this year's procurement?

When we began purchasing paddy in October, a procurement of over 27 million tonnes seemed unlikely. Initially, the procurement was lagging behind last year's corresponding purchase.

But now it has gained momentum and has already crossed last year's procurement. The latest procurement is 18.96 million tonnes as against last year's 18.53 million tonnes. We now expect to purchase 27.4 million tonnes (for the kharif season ending September), up from last year's 25.1 million tonnes.