Govt’s wheat, paddy procurement to fall below Budget 2022 target

In 2021-22, against a production of 109 million metric tonnes of wheat, the government procured 43.3 million metric tonnes but in 2022-23, against a production of 105 million metric tonnes, the government managed to procure just 18.7 million metric tonnes as of January.

Since then, in an effort to ensure enough wheat for domestic consumption and rein in prices for the Indian consumer, the government has banned the export of wheat and wheat flour.

The government also temporarily banned the export of broken rice, and imposed 20 percent export duty on non-basmati rice to ensure domestic supply. This also meant that paddy procurement by the government has been better.

Paddy farmers in Maharashtra's Pen say many of them opting to sell to the government at the MSP of Rs 2,040 per quintal, since it was higher than private prices.

Anil Kanekar, a paddy farmer said, “I sold my 5 quintal rice to government at the MSP of Rs 2,040. Government's rate was better. Here, private buyers who buy rice for poha manufacturing were offering Rs 1,400. Their best offer was Rs 1,800. So I sold my crop to the government.”

Another paddy farmer Santosh Mhandre said, “I sold my produce to government. Private buyers were offering only Rs 15 per kg but government MSP was Rs 20 per kg. So I went for that.”

Against a production of 166 million metric tonnes in 2022-23, the government has procured 67 million metric tonnes as of January 2023. But this is still lower than 2021-22 numbers, where against a production of 179 million metric tonnes, the government procured 86.6 million metric tonnes.

In all, the government has spent around Rs 87,250 crore on wheat, and Rs 1.36 lakh crore on paddy so far in FY23. But while the expenditure target in budget 2022 has been largely met, total quantity has been just 857 lakh tonnes, against a stated target of 1,208 lakh tonnes.

The government said that in 2022, paddy acreage fell by 38 lakh hectares due to less than average rainfall. This was expected to result in overall rice production falling by at least 10 million tonnes in the crucial kharif season, which accounts for nearly 80 percent of India's rice harvest. This would mean that the government would miss its rice procurement target for the year — a problem, given falling rice stock in government granaries and increased demand from the government's free rice and grain scheme that has been extended multiple times since the pandemic hit.

In addition, experts say the procurement plan may not benefit the budget estimate of 163 lakh farmers, though it will come close.

Pushan Sharma of Crisil said, “Government's target was that 163 lakh farmers will benefit from this year's wheat and paddy procurement but by the end of March, 150 lakh farmers will be the beneficiaries of wheat and paddy procurement.”

There are still two months to go for the year to end and the government hopes that by then, it will be able to achieve its procurement target by buying more paddy to make up for the shortfall in wheat.