Indian Economy News

Government procures paddy and wheat worth over US$ 31 billion (Rs. 2.5 trillion) in 2021-22: Food Ministry

  • IBEF
  • January 25, 2023

In the last eight years, the procurement of wheat and paddy in quantity and value terms has risen exponentially, with regard to a hike in the minimum support price (MSP), as informed by the Food Ministry of India. In addition to it, the number of farmers covered under the MSP operations has also increased due to the higher procurement of wheat and paddy by the Food Corporation of India (FCI).

The procurement is taking place in Himachal Pradesh, Assam, and Tripura, and the FCI has started buying paddy from Rajasthan.

In the case of wheat, the procurement increased to 433.44 lakh tonnes in the marketing year 2021-22 from 250.72 lakh tonnes in 2013-14. The value of wheat procured has increased to US$ 10.5 billion (Rs. 85,604 crores) from US$ 4.15 billion (Rs. 33,847 crores). In 2021-22, about 49.2 lakh farmers growing wheat benefitted, whereas, in 2016-17, about 20.47 lakh farmers benefitted. The MSP of wheat has been increased by 57% to US$ 26.07 (Rs. 2,125) per quintal from US$ 16.56 (Rs. 1,350) per quintal in 2013-14.

On the other hand, the procurement of paddy has increased to 857 lakh tonnes in the 2021-22 marketing year (October-September) from 475.30 lakh tonnes in 2013-14. The MSP value paid to the paddy farmers stood at nearly US$ 21 billion (Rs. 1.7 trillion) during the 2021-22 marketing year from around US$ 7.85 billion (Rs. 64,000 crores). In 2021-22, more than 125 lakh paddy farmers were covered under the MSP operations, as against 73 lakhs of farmers in 2015-16.

The Centre has asked the states to procure coarse cereals and distribute grains, apart from wheat and paddy. Currently, nine states are currently buying coarse cereals- Haryana, Karnataka, Maharashtra, Madhya Pradesh, Odisha, Uttar Pradesh, Uttarakhand, and Tamil Nadu. Additionally, maize, bajra, jowar and ragi are being bought at the MSP. The procurement of coarse cereals is expected to increase to around 9.5 lakh tonnes in 2022-23 from around 6.5 lakh tonnes in the previous year.

In Rajasthan, the procurement of wheat stood at 23.4 lakh tonnes in 2021-22 as against 12.69 lakh tonnes in 2013-14. The FCI has requested the Rajasthan government to shift to the decentralised mode for procurement (DCP) of foodgrains. Under the DCP system, the state government/its agencies procure, store, and distribute within the state. The excess stocks procured by the state/its agencies are handed over to FCI in Central Pool. The expenditure incurred by the state government on procurement, storage, and distribution of DCP stocks is reimbursed by the central government on the laid down principles.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.