With the Food Corporation of India (FCI) offloading  one crore MT of wheat under open market sale (OMS), the wheat procurement in Uttar Pradesh has been severely hit, and is unlikely to meet its target of procuring 55 lakh MT of the foodgrain in the current rabi marketing season. FCI, under OMS, is directly selling the wheat to bulk consumers – the wheat-based industry.

 “The OMS scheme has impacted wheat procurement in UP, since wheat-based industries are buying directly from farmers as the minimum support price (MSP) in UP is much lower at Rs 1,840 per quintal against the OMS-based price (Rs 2,080 per quintal),” a UP Food and Civil Supplies department official said.

“Besides, some farmers are also holding onto their wheat stock, since they anticipate higher prices for their crop in subsequent months as was the case last year,” he said, adding wheat procurement during the current marketing season was expected to settle at 40 lakh MT.

As per the original schedule, the wheat procurement season for the current Rabi season is to end on June 15 but has been extended to June 25 by the state government. Food commissioner Alok Kumar said that on the portal of Food department so far over 9, 61 lakh farmers had been registered. Against the wheat procurement target of 55 lakh MT, 35.55 lakh MT of wheat has been procured from over 7, 15 lakh farmers, which is 63, 83 percent of the target.  He said a payment of Rs 6,473 crore had been made to farmers through RTGS. During the last Rabi season 2018, UP had overachieved the wheat procurement target of 50 Lakh MT by procuring 53 lakh MT.

Under OMS, state-run FCI releases foodgrains at pre-determined prices in the open market to enhance supply of wheat and rice, especially during the lean season, to either moderate open market prices or offload excess stock.

FCI holds a humongous stock of  four crore MT of wheat, including old stock of 1.6 crore MT and more than 2,4 crore MT of new grain procured during the ongoing procurement season in major wheat growing states, including Punjab, Haryana and Madhya Pradesh. For the 2019-20 marketing year (April-March), FCI has set a wheat procurement target at 3, 57 crore MT. 

The price of wheat being offloaded by FCI stands at Rs 2,080 per quintal and is scheduled to be revised in August. The price will go up to Rs 2,200 per quintal in the current fiscal.

This year, the UP government had fixed 10 per cent higher of 55 lakh MT wheat procurement target compared to 50 lakh MT during 2018 Rabi marketing season. Every year, wheat procurement season commences on April 1 and continues for two-and-a-half months till June 15, 2019. So far, 680,000 farmers in UP have been paid Rs 6,300 crore against wheat purchase by the state agencies at more than 6,700 procurement centres.

Procurement of paddy and wheat had clocked robust figures under the BJP government, which came to power in March 2017. In 2017, the state registered wheat procurement of 37 lakh MT compared to 8 lakh  MT in 2016 under the Akhilesh Yadav-led Samajwadi Party  government thus registering a quantum jump of 460 per cent, which further rose by 43 per cent to 53 lakh MT in 2018.