Govt to give away more food as granaries bulge. The Union government’s record of purchasing large quantities of grain from farmers at low support prices this year points to the glut of wheat, with shares that violated previous limits, prompting the government to implement other warehouse reserves.
Even after the distribution of grain subsidies to the approximately 730 million beneficiaries under the National Food Security Act and the additional distribution of 5kg of grain per month per person under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), the government will be left with more than it needs. , known as buffer stock.
With the government paying high prices every year to buy more grain prices due to rising guaranteed prices known as low subsidy prices (MSPs), Indian wheat cannot be exported competitively. It is more expensive compared to imported wheat.
In the current season, the government has purchased more than 41 million tons of wheat, which is a record. To date it has paid an MSP amount of ₹ 81,000 crore to sorghum farmers.
In May, the government had a total value of 83 million tons of grain (wheat and paddy), which is 11 times the threshold for storage. That includes about 30 million tons of rice and 52 million tons of wheat, according to official statistics.
Flood stocks and the Food Corporation of India, the government’s largest food control center, have urged the government to take more steps to keep stocks in check.
“Government has started selling in open markets. Measures are also being taken such as the distribution of food to NGOs for the benefit of the poor, the deployment of armed forces and prisons, etc., ”said the official, requesting anonymity. The government deals with open sales in the market usually at a price less than the cost of buying these coins.
The government is currently in the process of developing additional funding programs for institutions such as NGOs and the military, the official said. It has already sold 300,000 tons of food grains in May to private traders.
PMGKAY will help clear the space for future harvest, the official said. The program will continue until November.
Government grain purchases of food stood at about 13% higher than last year, caused by over-production of grain despite the country facing shortages of other essential commodities such as oilseeds and polices.
Of the 41 million tonnes of wheat purchased, 13.2 million tonnes were purchased from Punjab farmers, the highest figure, followed by 12.8 million tonnes from Madhya Pradesh and 8.4 million tonnes from Haryana farmers.
“Higher prices mean that Indian wheat has to sell for at least $ 38 a ton, which is higher than the international price,” said Abhishek Agrawal of Comtrade, a commodity trading company.
The new MSPs announced Wednesday with summer crops are designed to force farmers to move away from too many grains, by setting higher oil seed prices and pulses, their yields and availability are lower. For example, India imports up to three-thirds of its vegetable oil to meet domestic needs.
MSPs are low-cost government grants that aim to avoid miserable sales by farmers and to determine the proportion of private traders. But private retailers can pay higher prices or, as always, lower than MSP, depending on market demand and demand.
However, farmers are likely to grow more grains than oilseeds, which is a fertile harvesting pattern because the government buys more wheat and rice at MSP prices and allocates it to the beneficiaries through the distribution system at subsidized prices. This is mainly how farmers benefit from the MSP program.
“This is not helping to ensure the safety of healthy food in India. The PDS system means that poor people get a lot of carbohydrates but not enough other nutrients at low prices, ”said Alokesh Khandekar of the Consultative Group on International Agricultural Research (CGIAR).
Experts say that the real incentive for farmers to abstain from large quantities of grain would be to ensure that oil and pulse seeds were available in sufficient quantities. “High MSP oilseeds and pulses show farmers the level they are supposed to get, not what they actually get in the market,” said KS Mani, former dean of Tamil Nadu Agriculture University.