Low buffer spurring wheat imports

The government today indicated plans to import additional 1.5 million tonne of wheat even though the wheat growers had gathered in Delhi to protest against such imports.

The additional imports are meant to augment food stocks in the severely-depleted central grain pool. The fresh order would push up total wheat imports to 2.0 million tonne.

Indicating the government's plans to newspersons today, food and agriculture minister Sharad Pawar expressed the hope that the domestic wheat procurement target of 16.2 million tonne will be met.

Wheat purchases by official agencies have already begun in some states though the arrival of fresh crop in the main wheat belt of Punjab, Haryana and western Uttar Pradesh is likely to pick up in the next week or so.

However, this move is likely to evoke adverse reactions from political parties and farmers organisations. Members of several peasant organisations of Punjab today staged a protest rally in the Capital to oppose wheat imports. They also questioned the timing of such imports as the domestic wheat marketing season has just begun.

Bhartiya Kisan Union (BKU-Ekta) president Pishora Singh said if the government could import wheat at around Rs 850 a quintal (landed cost of imported wheat), why could it not pay the same price to local growers who would raise output to fill up the silos. The procurement price of wheat for the current rabi marketing season is Rs 650 a quintal.

According to food ministry sources, wheat import has been necessitated by depletion of official wheat stocks to below the minimum buffer stocking norms.

The total wheat stock had plummeted to 6.18 million tonne by January 1 last, against the buffer requirement of a minimum 8.2 million tonne on that date.

These inventories are estimated to fall further down to 2.2 million tonne by April 1 due to supplies to public distribution system, welfare and employment schemes and open market sales undertaken by the Food Corporation of India (FCI) as a market intervention measure. This will be far below the buffer stocking norm of 4 million tonne for April beginning.

The ministry sources also point out that even if the government manages to procure the targeted 16.2 million tonne of wheat from the new crop, the actual wheat stocks in the official kitty will remain below the minimum buffer norms throughout 2006-07.

The ministry reckons the actual stocks to be around 14.2 million tonne on July 1, against the requirement of 17.1 million tonne. By October, the stock holding will shrink to 10 million tonne, against the buffer norm of 11 million tonne, and by January 2007, it will be further down to 5.8 million tonne, against the need of 8.2 million tonne.

These calculations take into account the measures that have already been taken to reduce outflow of wheat from the official stocks.

These include the decision taken by the rural development ministry not to issue wheat as part of the foodgrain component of wages under the National Rural Employment Guarantee Scheme being implemented in 200 districts.

Besides, the FCI has already begun cutting down wheat allocations of southern states by replacing them with that of rice.

Now, the food ministry has mooted a uniform 10 per cent cut in wheat allocations of all the states for the targeted PDS.

The wheat production this year is being projected by the agriculture ministry at 73 million tonne, short of the target of 75 million tonne, but higher than last year's output of 72 million tonne.

Some damage to the wheat crop was reported in many wheat growing states due to unusual rise in temperature in February and unseasonal rains and hail storms in the beginning of March.

While part of the damage to the crop in Punjab, Haryana and Uttar Pradesh is expected to be made up thanks to post-rainfall drop in temperature in March, the damage due to hail is unlikely to be compensated.

Madhya Pradesh is the worst affected state where hail storms took a heavy toll on the wheat crop. The area under wheat, too, had shrunk in this state as the crop could not be grown over about six lakh hectares due to paucity of soil moisture at the time of sowing.

The drop in output will be confined largely to Durum wheat, which is used for making pasta products and, therefore, fetches higher prices in the market.