Problem of Plenty

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Problem of Plenty

In fact, the government may export 4-5 million tonnes of wheat lying in FCI godowns to cope with a storage crisis, a food ministry official said recently. A committee, headed by C Rangarajan, chairman of the prime minister’s economic advisory council (PMEAC), to examine the possibility of exporting wheat, has also recommended exporting that much wheat. By June, the government will have procured 75 million tonnes of wheat, but FCI can store only 63 million tonnes — 12 million tonnes of wheat and nowhere to keep it.

The Economic Times reported recently, quoting a Ministry of Food official: “We need to incentivise the movement of grain, if we are serious about the storage issue. The wheat stock with FCI is close to 20 million tonnes. By the end of this wheat procurement season, 33-34 million tonnes would be added while the total storage capacity is at 63 million tonnes. For moving wheat out, export incentives are a must.”

India was absent in the world wheat market for six years. After it lifted export restrictions in September last year, it has been able to export only 850,000 tonnes of wheat. State Trading Corporation (STC), a government-run trading company, recently invited bids from overseas wheat buyers to discover the market value of Indian wheat. Last week, Food Minister K V Thomas said India was exploring possibilities of exporting wheat from the central pool to countries such as Uganda, Afghanistan and Pakistan, which need wheat.

In the 2011-12 Economic Survey, the government cited increased minimum support price and a few other reasons for the higher levels of foodgrain procurement. As a result, there is adequate grain to meet the TPDS needs and buffer stocks stipulations.

In an unprecedented intervention last year, the Supreme Court had directed the government to release decaying wheat stocks for the hungry rather than have them rot completely. Contesting the ruling, Prime Minister Manmohan Singh contended that to implement it would hurt the interests of the farmers by denying them remuneration for their produce.

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