Wheat Procurement on MSP Rises by 13% Despite Slow Start to the Season

The Food Corporation of India (FCI) and state governments have increased their purchases of wheat in the recent week. This year's harvest was delayed owing to unseasonal precipitation, resulting in a slow start to the season. Since the start of minimum support price (MSP) operations on April 1st, agencies have purchased 12.45 million tonnes (MT) of wheat from farmers, an increase of 13% year on year. 

Punjab has contributed the most to wheat procurement so far, with 4.97 MT, followed by Haryana with 4.2 MT and Madhya Pradesh with 3.48 MT. MSP purchases have been minimal in Uttar Pradesh and Rajasthan. 

According to official statistics, 16.13 MT of wheat has arrived in the important mandis thus far, compared to 15.45 MT reported in the first three weeks of the procurement season (April-June) last year. The MSP wheat-buying operations helped 1.31 million farmers. To date, government agencies have paid 12,037 crore against the total of 26,188 crore to be given to farmers for wheat procurement.

The government plans to buy 34 MT of wheat this season to replenish the storage, which fell to 8.4 MT on April 1st, the lowest level since 2016. Last week, the food ministry increased the purchase of shrivelled and cracked grain from farmers with stipulated value to 18%, up from 6% in Punjab, Haryana, and Rajasthan. 

The government modified procurement regulations on March 31st, permitting the purchase of cereals with quality losses of more than 10% from farmers in Madhya Pradesh at a marginal value cut of 5.31 per quintal against the MSP of 2,125 per quintal for the current season.