Wheat farmers may have earned Rs 5,994 cr more by selling grains to pvt traders at higher price

PTI, 10th Jun 2022

New Delhi, Farmers may have earned Rs 5,994 crore extra by selling their wheat crops to private traders this year at higher rates, rather than offering the grain to the government at minimum support price (MSP), according to the food ministry.



Wheat is a major rabi (winter-sown) crop. It is sown in October-November and mainly harvested during April-May.

In a statement, the ministry said: "Wheat farmers across the country benefitted from the higher market rates as mostly/majority of farmers sold their produce to the private traders at higher market rate in comparison to the MSP."

Accordingly, it said, farmers could reap higher remuneration for their produce which is the main objective of the policy of the central government. The prevailing situation, where more options were made available to farmers to sell their produce, empowered them to sell their grain in open market.

The ministry said farmers reportedly sold their produce at an average rate of Rs 2,150 per quintal thereby earning more on selling their produce in the open market as compared to MSP value.

"Accordingly, on the estimated procurement quantity of 444 lakh tonne, on an average, the farmers may have earned around Rs 95,460 crore at the rate of Rs 2,150 per quintal instead of Rs 89,466 crore at the MSP of Rs 2,015 per quintal. Thus the wheat farmers may have overall got more than Rs 5,994 crore compared to MSP," the statement said.

Wheat procurement in the 2022-23 marketing year, which started in April, is down by 58 per cent so far. It is expected that the procurement of wheat during 2022-23 might touch only 190 lakh tonne as against the target of 444 lakh tonne. Wheat purchase stood at 433.44 lakh tonne in 2021-21 rabi marketing season (RMS).

"The downward trend in public procurement is attributed to the significantly higher purchase of wheat by private traders as wheat price in the international market has shot up due to international demand-supply mismatch on account of prevailing geopolitical situations," the ministry said.

The market prices of wheat remained continuously higher than the MSP throughout the procurement period across the country at around Rs 2,100-2,500 per quintal.

On the domestic front, the country has surplus wheat and rice stocks available currently as well as for next year, the ministry said.

After consultation with states, the Centre has re-allocated wheat provision in favour of rice under PMGKAY (Pradhan Mantri Garib Kalyan Anna Yojana) and NFSA (National Food Security Act), thereby freeing 117 lakh tonne of wheat.

After meeting all requirements under the food law and other welfare schemes for 2022-23, the projected wheat stock position as of April 1, 2023 would be around 141 lakh tonne, which is around two times the minimum requirement as per stocking norms of 75 lakh tonne.

"There exists a transparent and uniform policy for procurement of wheat by FCI and State Government agencies across the country," the statement said.

In any state, the net marketable surplus quantities offered by the farmers within the stipulated procurement period and conforming to the prescribed specifications are purchased at MSP for central pool by the government agencies.

"However, if any producer/ farmer gets better price in comparison to MSP, he is free to sell his produce in open market," the ministry said.

The major wheat procuring states in the country with substantial contribution to public procurement is Punjab, Haryana, Madhya Pradesh, Uttar Pradesh and Rajasthan.

The Centre has regulated wheat export with effect from May 13, 2022 which changed the market dynamics, preventing speculative wheat trading and cooled down the inflationary trend of the price of wheat and wheat products in the domestic market, the ministry said.

In order to ensure that no farmers with surplus wheat are affected on account of exports regulation, the Centre has extended the procurement season.

"This extension facilitated those farmers, who had not participated in public procurement earlier but were keeping the wheat stocks with them, to come to purchase centres for selling wheat to FCI & State procuring agencies," it said.

To mitigate sufferings of farmers of Punjab and Haryana due to a fall in yield of wheat crop on account of early onset of summer and untimely heat wave, the Centre has relaxed permissible limit of shrivelled grains from 6 per cent to 18 per cent in Punjab and Haryana.

"Still, the wheat arrivals in mandis for public procurement was lesser which is a clear indication that farmers were able to get a better price than MSP and they were able to sell directly to private buyers at higher rates," the ministry said.