India’s New Wheat Basket

For the past six decades, Punjab has held the enviable position of being India’s wheat basket. The state had been the unbeaten champion when it came to cultivating and procuring wheat and sending it to the central pool. But in a ground-breaking shift this year, Madhya Pradesh dethroned it to become India’s top wheat producer. The central Indian state had already picked up more than 12.9 million tonnes by June 8, ahead of Punjab’s 12.8 million tonnes, and with procurement still continuing in Bhopal, Indore, Ujjain and Dewas districts, the difference might grow substantially. MP has already secured around 33 per cent of India’s total 38.7 million tonnes in wheat procurement.

How did a state that was nowhere on the wheat scene get into the pre-eminent category? Its wheat procurement last year was only 7.37 million tonnes, just over half of what it is this year. One major reason for higher procurement is greater production. Madhya Pradesh had been anticipating a bumper harvest of wheat in 2020. But the state government, which procures wheat on behalf of the Centre, did not anticipate such huge amounts (primarily because a large part of the production is sold at mandis to private traders). This was disrupted by the pandemic–the mandis, located in urban areas, were seen as places where crowding would increase and hence were not allowed to open.

Initially, preparations were made for procurement of around 10 million tonnes which eventually had to be scaled up. Wheat production in MP in 2020 was estimated at 33.7 million tonnes, up from the 25.3 million tonnes produced in 2019. The increase in production was mainly due to the additional 25 lakh hectares that came under wheat cultivation in 2020. In 2019, the area under wheat stood at 7.72 million hectares while in 2020 it increased to 10.23 million tonnes. The increase came mainly at the cost of gram, a crop farmers dropped after a plentiful monsoon left reservoirs full. There is a marginal increase in productivity too.

Another important reason for higher procurement is private traders not buying much stock in the state. The Madhya Pradesh government had tom-tommed an amendment in the Mandi Act which enables farmers to sell their produce outside the designated mandis. In other words, farmers could sell their produce from their homes to traders who would record the transaction on a sauda patrak or certificate. The state government had said the amendment would prove to be a boon for farmers in Covid times when mandis are closed. Apparently, it did not find too many takers among the farmers for the simple reason that the prices offered by private traders were a good Rs 200 lower than the Rs 1,925 per quintal MSP offered by the government. The sale of wheat through mandis and private traders between March 25 and May 31, 2020, stood at 2.1 million tones, which is merely 7 per cent more than the 1.9 million tonnes recorded for the same period in 2019. Contrast the 7 per cent more arrival through private trade with the whopping 74 per cent more procurement by the government. As an aside, the additional procurement by the government also validates the reason for having an MSP. Absence of an MSP in a crisis year such as 2020 would have compelled farmers to sell their wheat at much lower prices. The total number of farmers who registered for the procurement process in 2020 was around 2 million, which was the same as in 2019. While in 2019, 966,000 farmers sold their wheat to the government, in 2020 this figure jumped to around 1.57 million. In other words, almost 600,000 more farmers sold their produce to the government.

“Another reason for the additional procurement was also the relaxation of Fair Average Quality (FAQ) norms by the Union government for procured wheat. This allowed farmers whose wheat had lost lustre due to rain to sell their produce,” says Sheo Shekhar Shukla, principal secretary, food and civil supplies, government of Madhya Pradesh. Besides that, the number of buying centres was increased from 3,545 last year to 4,529 in 2020. This reduced the queues at the centres. Payment within a week also made the government the buyer of choice for the farmers.

Naysayers say the procurement numbers going up was also the result of wheat from neighbouring states landing up in Madhya Pradesh for sale. This does not add up because the MSP in all states is the same this year, unlike some years when a bonus is announced by a state government which makes prices in that state the highest. Nearly Rs 25,000 crore has been paid so far to farmers for the procured wheat.

Punjab, meanwhile, puts the blame on 3 Cs—charity, COVID and climate—for falling behind on the final procurement target set by the Food Corporation of India (FCI). The mid-March rains and hailstorms led to the wheat crop ripening in stagnant water in many of the fields in Patiala, Ropar, Fatehgarh Sahib and Mohali districts of the state. Along with this, the Covid scare kept many farmers away from the APMC mandis. They are keeping their grains for the open market now. Many of them have also made large donations of grains to local gurudwaras, NGOs and other philanthropic institutions.

Source: India Today