\u2713From an all-time high last year, procurement of wheat is set to hit a 15-year low this season, falling below existing stocks for the first time.<\/p>\n\n\n\n
\u25cf Current Procurement Scenario:<\/p>\n\n\n\n
\u2713The 18.5 million tonnes (mt) likely procurement this time will be the lowest since the 11.1 mt bought in 2007-08.<\/p>\n\n\n\n
\u2713This is the first time that wheat procured from the new crop (18.5 mt) is less than the public stocks at the start of the marketing season (19 mt).<\/p>\n\n\n\n
\u25cf Reason for low Procurement:<\/p>\n\n\n\n
\u27132 main reasons for procurement plunging to a 15-year-low this time –<\/p>\n\n\n\n
\u22061.Export Demand:<\/p>\n\n\n\n
\u2713In 2021-22, India exported a record 7.8 mt of wheat.<\/p>\n\n\n\n
\u2713Supply disruptions from the Russia-Ukraine war have led to skyrocketing prices and a further increase in demand for Indian grain.<\/p>\n\n\n\n
\u2713Indian wheat getting exported at about $350 or Rs 27,000 per tonne free-on-board (i.e. at the point of shipping)<\/p>\n\n\n\n
\u2713The farmers are realising well above the minimum support price (MSP) of Rs 20,150\/tonne at which the government is procuring.<\/p>\n\n\n\n
\u22062.Lower Production<\/p>\n\n\n\n
\u2713The sudden spike in temperatures from the second half of March has taken a toll on yields.<\/p>\n\n\n\n
\u2713In most wheat-growing areas farmers have reported a 15-20% decline in per-acre yields.<\/p>\n\n\n\n
\u2713A smaller crop, in combination with export demand, has resulted in open market prices of wheat crossing the MSP in many parts of India.<\/p>\n\n\n\n
\u2713The shorter the distance to the ports, the higher the premium that exporter\/traders have paid over the MSP.<\/p>\n\n\n\n
\u2713Many farmers are holding back their crops.<\/p>\n\n\n\n
\u2713Such \u201choarding\u201d by farmers was seen in the recent past in soyabean and cotton, too, again driven by soaring international prices.<\/p>\n\n\n\n
\u25cf Availability at Government level:<\/p>\n\n\n\n
\u2713With opening stocks of 19 mt and expected procurement of 18.5 mt, government agencies have 37.5 mt of wheat available for 2022-23.<\/p>\n\n\n\n
\u2713The normative buffer or closing stock requirement for March 31 is 7.5 mt.<\/p>\n\n\n\n
\u2713Pradhan Mantri Garib Kalyan Anna Yojana scheme<\/p>\n\n\n\n
\u2713The last two years have also witnessed substantial offtake under the scheme.<\/p>\n\n\n\n
\u271310.3 mt in 2020-21 and 19.9 mt in 2021-22<\/p>\n\n\n\n
\u2713Open market sales to flour mills (2.5 mt and 7.1 mt, respectively).<\/p>\n\n\n\n
\u2713One can expect wheat prices to firm up and a rerun of what happened in 2006-07 and 2007-08.<\/p>\n\n\n\n
\u25cf Conclusion:<\/p>\n\n\n\n
\u2713The relatively tight supplies in wheat this time is compensated for by the comfortable public stocks of rice. A good monsoon should further augment availability from the ensuing kharif crop and tide over the shortages in wheat.<\/p>\n\n\n\n
\u25cf Prelims Takeaway:<\/p>\n\n\n\n
\u2713Wheat procurement by the government<\/p>\n\n\n\n
\u2713Pradhan Mantri Garib Kalyan Anna Yojana scheme<\/p>\n\n\n\n
\u2713Export Demand of wheat<\/p>\n\n\n\n
UPSC Daily Current Affairs Quiz \u2013 13 May 2022<\/a><\/p>\n\n\n\n