New Delhi: With private players aggressively buying wheat directly from farmers, the government on Tuesday revised its procurement target downward by 25 percent to 33 million tonne (MT) for the 2013-14 marketing year, which will help the Centre save about Rs 3,000 crore.
In view of higher output, government had pegged wheat procurement to be a record 44.12 MT in the current marketing year that started in April, as against 38.1 MT last year.
"The procurement target has been revised downward to 33 MT for this year due to active buying by private players in states like Madhya Pradesh and Uttar Pradesh," a senior Food Ministry official told the agency.
As per the revised estimate, the government is expected buy 11 MT in Punjab, 7 MT in Haryana, 9 MT in Madhya Pradesh, 3 MT in Uttar Pradesh and 2.5 MT in Bihar this year.
The expected drop in wheat procurement will reduce the burden on storage and help the government save about Rs 3,000 crore thereby bringing down the overall food subsidy bill, the official said.
The reasons for lower procurement, the official said unlike previous years, private players such as roller millers have stepped up their wheat buying directly from farmers because they have realised from last few years' experience that they would not get the cheaper grain under government's open market sale scheme (OMSS) later.
Last year, the Food Ministry did not relent to millers' demand to reduce wheat price under OMSS for bulk users. "This resorted them to aggressively buying directly from farmers this time," the official said.
Lower procurement is expected also because traders are buying more wheat to meet the export demand, while some big farmers are seen holding stock anticipating higher price after the harvesting season, he said.
That apart, FCI has emphasised the state agencies to enforce quality standards keeping in view the requirement of stocks for export purpose.
According to FCI data, the government has so far procured over 20 million tonnes of wheat at the minimum support price of Rs 1,350 per quintal.
Although the procurement is expected to be lower than the last year, but the quantity is sufficient to maintain the government's buffer stock and fulfil the demand of PDS and other welfare schemes, the official said.
As on April 1, state-run Food Corporation of India (FCI) had 24.2 MT of wheat. This year's estimated procurement would take total wheat in FCI godowns to 57.2 MT.