Wheat procurement by govt agencies to fall by 33%: Govt

Thomas said wheat procurement in the year beginning April 2013 will be 33 percent lower than last year.

New Delhi: Wheat procurement by government agencies this year will fall to about 25 million tonne from 38 million tonne last year due aggressive buying by private traders, Food Minister K V Thomas said on Friday.

Replying to supplementaries during Question Hour in Rajya Sabha, Thomas said wheat procurement in the year beginning April 2013 will be 33 percent lower than last year.

Food Corporation of India (FCI), the nodal agency for procurement and distribution of food grains, and state agencies had procured 37.35 million tonne wheat last year.

Although wheat marketing year runs from April to March, the entire procurement exercise generally gets over by June.

"This season production has been good but procurement will come down from 38 million tonne (last year) to 25 million tonne" as private players are aggressively buying foodgrain, he said.

Private traders are buying wheat at a rate higher than government's Rs 1,350 a quintal Minimum Support Price (MSP).

Thomas said as against the requirement of 62 million tonne of foodgrain for implementation of the landmark Food Security Bill, which guarantees 5 kg rice, wheat and coarse cereals a month at heavily subsidised price to two-third of the nation's population.

Those in the poorest category will receive 35 kg of food grains. Approximately 75 percent of rural residents and 50 percent of urban residents will be covered by the subsidy scheme.

"When food security bill is implemented, what we need is 62 million tonne per year. (Against this) last year, we procured 82 million tonne," he said.

The subsidy outgo will be Rs 1,25,000 crore, Thomas said, adding the subsidy for implementing the public distribution system (PDS) was Rs 1,09,000 crore last year which will rise to Rs 1,13,000 crore this year.

"Government is confident it will manage the additional subsidy arising out of food security bill," he said. "We are not worried (about foodgrain stocks). If food security bill is accepted by both Houses, we can go ahead, because we have enough."

Thomas said total covered storage capacity for foodgrain available with FCI both owned and hired is 355.19 lakh tonne.

For creation of additional storage capacity, government has formulated a scheme called Private Entrepreneurs Guarantee (PEG) scheme for guaranteed hiring by FCI.

"In 2013-14, against a target of 60 lakh tonne capacity creation under PEG scheme, 3.36 lakh tonne has been completed up to July," he said.