Punjab and Haryana set to miss wheat procurement target

Apart from excessive heat in March hitting crop yield, several farmers are holding their crop back in hope of further spike in international prices bringing in better returns than MSP. The global demand for Indian wheat is expected to rise amid Russia’s invasion of Ukraine, both major wheat exporters. Private players too are picking more wheat than expected from mandis in both states.

Punjab, which was the biggest contributor to the central pool last year, had set itself a target to procure 130 lakh tonnes of wheat this season. However, the unusual surge in temperatures in March led to shrivelling of grain that is expected to bring down yield by around 15%. Punjab’s total wheat production, which used to be 170 to 175 lakh tonnes earlier, is likely to settle between 140 to 150 lakh tonnes this year.

Paramvir Singh (24), a young farmer, said that he has sold just one-third of his produce and is holding back the rest.

“This time, the yield is very less and we would not be able to meet the expenses for even paying the rent of land taken on lease. So, we have decided to keep maximum produce with us to sell it later at a higher price. I have been reading in the news that there would be a huge demand of wheat in the international market in the coming days which will also spike the price of wheat, which is already being exported at the rate of Rs 2,500-2,600 per quintal at Indian ports. I may get much higher than the MSP which stands at Rs 2,015 per quintal,” said Paramvir. He added that earlier farmers would hold back just 5-10% wheat for seed and self-consumption purposes, but this year most would not sell around 20-25% of their produce immediately.

Another farmer, Abjinder Singh Sangha of village Gowara in Malerkotla, said that he has decided to hold 25% of his total produce for now.

“This year there would be huge demand of wheat in the global market due to the war between Russia and Ukraine as both the countries have 25% share of wheat in the export market,” said Sangha. He said that farmers are acting to make up for the loss due to yield loss.

So far, government agencies in Punjab have only purchased 54.74 lakh tonnes of wheat out of targeted 130 lakh tonnes, which comes to 42% of the total target.

Currently, around 7 to 8 lakh tonnes of wheat is coming to the state’s mandis daily. A senior officer in the state Punjab Food and Civil Supplies Department said the procurement this season would likely be around 100 lakh tonnes only.

Private buyers too are picking wheat from both inside and outside the mandis at a premium of Rs 5-10 on the MSP declared by the government. While last year they had purchased just 1.17 lakh tonnes in the entire season, this year already they have picked 3.16 lakh tonnes in Punjab till date.

In 2021, government agencies had procured132.08 lakh tonnes of wheat, 2 lakh tonnes more than the target set by the state last year in 34 days Rabi season that began on April 10 and ended on May 14.
This year, procurement in Punjab started on April 1 and and will end most likely in the first week of May.

In the first 17 days of wheat procurement in Haryana, the state’s mandis have witnessed nearly 20% less wheat arrival compared to last year. Haryana has set itself a target to procure 85 lakh tonnes of wheat this Rabi season. However, state government officials believe that the final procurement would be around 10-15% less than the declared target. Some officials, who spoke to The Indian Express, also feared that this gap could touch even 25% by the time procurement drive wraps up on May 15.

Again the state agencies blame adverse weather conditions for the low yield, which they claim have hit arrivals in mandis. The crop yield has dropped by 8-10% in the state, according to some estimates.
A senior officer of Haryana Agriculture and Farmers Welfare Department confirmed that a section of farmers is holding back wheat, anticipating a hike in the current prices.

In Haryana, more acreage being dedicated to mustard this year is also among the factors contributing to less wheat production.

According to the official figures, till April 17 this year, 32.91 lakh tonnes has reached state’s mandis, while as much as 41.11 lakh tonnes of wheat was procured till this day last year.
Last year, total 84.93 lakh tonnes wheat was procured across mandis in Haryana.

Private traders in the state have been offering a marginally higher than MSP price to farmers as big wheat exporters — Russia and Ukraine – are missing from the wheat export market.

A farmer from Fatehabad, Satyawan Singh, said: “Farmers may hold back stock up to 5 per cent or more wheat this time hoping higher prices while the remaining 25 per cent wheat is likely to be stored by traders. Farmers are not in the position to hold back a lot of wheat. The financial condition of farmers and pressure to spend on the next crop will force them to sell wheat as early as possible. So, in the end, traders will benefit.”

Senior farmer leader Gurnam Singh Chaduni added: “Government should give a bonus of Rs 500 per quintal keeping in mind the low production and higher prices of wheat in the international market this year.”

©Indian Express