India’s Wheat Procurement at a Record High

FCIs wheat purchase increased 13% than the previous year. India’s wheat procurement for food security and Public Distribution System at a record high.

FCI Purchase of Wheat

A government statement revealed that FCI had purchased 38.83 million tonnes of wheat this year. 4.7 million tonnes more than the previous year’s purchase. An official predicts that the government will end up buying 40.5 to 41 million tonnes this year— a similar record high wheat purchase made in 2012 which led to the rotting of stocks. The corporation will run out of storage space soon if it continues to make purchases at this level. The experts predict this year’s output at 107.18 million tonnes, versus 103.60 million tonnes produced in the previous year.

India Increases Wheat Procurement for Food Security
India Increases Wheat Procurement for Food Security

Working of FCI

FCI is a government authorized organization that buys grain from farmers at a state-set guaranteed price. It procures rice and wheat from farmers via paddy purchase centres, mill levy, and custom milling. Also, it maintains depots like food storage depots and buffers storage. After that, it transports the stocks at the rates declared by the Government of India to state governments for further distribution under the Public Distribution System.

Private Traders Avoided Procurement of Wheat this Season

The annual guaranteed price offered by the government to the farmers has led to overflowing bins. Not only this, but the guaranteed price has also pushed price by $35 a tonne above world market prices. This has made the export of wheat impossible for India. Private traders have avoided buying it this season due to the lockdown. Consequently, government granaries have overflown.

In all, if procurement continues at such as rate, the FCI will face shortage of storage space.

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