The food ministry is likely to ask Madhya Pradesh and Uttar Pradesh, among other major wheat producers, to create more storage for the upcoming marketing season starting April, senior government officials said.
The government has been struggling with a space crunch in the central pool for the past few years and has asked states to create temporary storage spaces under the 'covered and plinth' category. Food grain stocks with government agencies were at 53.0 mln tn as on Jan 1, sharply higher than the buffer of 21.4 mln tn, which is required.
The stocks include 18.7 mln tn milled rice and 34.3 mln tn wheat, against the required buffer of 7.6 mln tn and 13.8 mln tn, respectively. At the beginning of the year, the government had 40.4 mln tn of un-milled paddy, which took total inventories to over 93 mln tn, sharply higher than its storage capacity of 87.8 mln tn.
"Wheat procurement from most major states is likely to be higher from last year, particularly from Uttar Pradesh and Madhya Pradesh. This prompted requirement for additional storage spaces," an official said. For 2021-22 (Apr-Mar), wheat procurement is pegged at 42.7 mln tn, nearly 10% higher than the actual purchases of almost 39.0 mln tn in 2020-21. Among states, Madhya Pradesh expects to buy a record high of 13.5 mln tn, up more than 4% on year, and Uttar Pradesh expects to buy 5.5 mln tn, up 54%.
Last year, Punjab and Haryana, the two major contributors of rice and wheat, were asked to add more space for the grains. "There is a requirement for creating additional spaces as the government is already struggling with overflowing granaries. Some states also expect procurement to cross the estimated levels amid the continued farmers' protest in parts of north India," another official said. The storage crisis may turn severe with the start of wheat procurement as private purchases from the government pool are terribly low despite several price cuts at its weekly auction programme under the open market sale scheme.
So far in 2020-21 (Apr-Mar), the Centre has sold only 870,036 tn of wheat to private buyers, down 62% on year. Although rice sales at the auctions have been higher on year, they are still significantly lower than government's expectations. Rice sales under the scheme are at 40,780 tn, higher than 29,750 tn sold a year ago. The Centre has targetted to offload 5 mln tn rice under the scheme in 2020-21. The government is also looking at other ways to enhance storage capacity in the central pool, including proposals to use the empty spaces for warehouses and silos at unused rail yards. "These proposals are good in the long term but to deal with the current storage crisis, creation of temporary storage spaces are necessary," another official said.