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Approach:

  1. Introduction.
  2. Mention the low procurement with reasons.
  3. Is there a food crisis situation ?
  4. Conclusion stating increased rice allocation & need for exports cap.

Recently, the government revised wheat allocation for 11 states under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), implying that states like Bihar, UP, Kerala, Gujarat, etc. will receive nil to very little wheat in coming months. The government procured 16 MT of wheat, which is 30% less than last year’s (2021) 23 MT. Government wants to procure 44.4 MT of wheat in 2022-23.

Government procurement in Punjab was 8.9 MT against the target of 13.2 MT, in Haryana it was 3.7 MT as against 8.5 MT, and in Madhya Pradesh it is only 3.4 MT against 12.9 MT. Three main reasons have been cited for reduced wheat procurement –

  • Heat waves experienced in March-April when the crop was to ripen.
  • Russia-Ukraine crisis has caused global wheat shortage, causing India to export the grain.
  • Buying wheat by private traders at high prices from farmers, after assurance of wheat exports from ports of Visakhapatnam, Kakinada, Nhava Sheva and Kandla. Hence, lesser wheat is reaching mandis or wholesale markets.

Acc. to 2nd Advanced Estimates, India was to produce 111.32 MT of wheat. But the heatwaves in March-April has upset things, estimating a produce of 105 MT. Heat waves have reduced wheat production by 30%.  In 2021-22, India is expected to consume 97 MT of wheat, which leaves only 14.32 MT at India’s disposal.

Can food security be hurt ?: the government procures food grains through the PDS to avail them to the poor at cheaper costs & ensure a minimum support price to farmers. Some 46 MT of wheat has been allocated under various government schemes in 2020-21 – including 25.8 MT under the National Food Security Act. Another 20 MT of wheat is allocated under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) as Covid relief.

Analysis estimates that government should have 25 MT for PDS and 10 MT for PMGKY. By July end, the total requirement would be 57 MT, but India will manage only 38-39 MT. Additionally, India won’t cut exports and targets to export 10 MT of wheat. These have raised speculations on an imminent supply shortage, triggering food crisis.

Whether this will be a food crisis for India is a matter that will unravel slowly in near future. But to plug the shortfall, the government has decided to give 5.5 MT of rice instead of wheat. Given the surplus of rice in the central pool, some 35 MT of rice will be distributed under NFSA. Also, if status quo prevails, it can lead to wheat imports. Since speculation of supply shortfall coupled with private procurement can shoot up prices, the government needs to fix a cap on wheat exports in the range of 10-12 MT.

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