Commodity Online NEW DELHI: India is heading for general elections this year. And, the government is desperate to keep enough grains to feed the country’s 1 billion population during the crucial election year.
The UPA coalition at the Centre is well aware of the impact if the grain prices go up during an election year.
During the past few months, global prices for wheat, pulses and corn have gone up beyond a common man’s limits. This has already sent a chill down the spine of the Central government, especially when it had to import wheat to keep its PDS supply unaffected.
So, this year also the government is trying desperate to collect enough stocks from the domestic market to keep the FDI godowns full so that grain supply during the election season is not hit.
For any government it is very important to keep the food prices under control to keep its vote bank intact.
In anticipation of the price rise, soaring inflation rates and global foodgrain shortage, the Centre has decided to collect enough wheat right from the beginning of this fiscal.
According to officials, the centre will start procurement of wheat on April 1 in Punjab and Haryana and enough funds were allotted for this.
The Food Corporation of India (FCI) and state agencies are hoping to lift a 125 lakh tonnes of the grain during rabi marketing season 2008-09.
The government had earlier hiked the minimum support price (MSP) for wheat to Rs 1,000 a quintal.
For the wheat procurement, the Reserve Bank (RBI) has sanctioned a credit limit of Rs 8,013 crore for Punjab this season, while Haryana has sent a proposal for Rs 2,696 crore.
Punjab and Haryana are expecting increase in arrival of wheat in mandis this year at 105 lakh tonnes and 45 lakh tonnes, respectively.
FCI had expressed concern over the dwindling arrival of wheat in both states last month. It is perceived that farmers might sell crop directly to other states after ‘avoiding’ conventional route of bringing their crop in the markets.
The Punjab government has notified 1,600 mandis for the procurement, while Haryana has approved 362 markets sheds in the entire state for lifting wheat, which will commence from April 1.
Punjab is expecting to procure 85 lakh tonnes of wheat during this season, the state has set different targets for various procurement agencies.
Haryana is also hoping to lift over 40 lakh tonns of wheat from the state with procurement agencies such as Hafed, Confed, Haryana Warehousing, Haryana Agro, Food and Supplies and FCI this season.
In 2007-08, the total procurement of wheat from Punjab and Haryana stood at 67.80 lakh tonnes and 33.5 lakh tonnes, respectively.
The arrival of wheat in the states during 2007-08 has gone down by 26.31 lakh tonnes and 27.54 lakh tonnes, respectively, as compared with arrival in 2001-02.
