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FCI steps up measures for storage of wheat

posted Mar 3, 2012, 10:16 PM by Puneet Goyal
Vikas Sharma / Chandigarh Mar 03, 2012, 00:32 IST

The Food Corporation of India (FCI), the country’s largest grain procurement agency, has adopted a number of measures to create space for the new wheat stocks in Punjab and Haryana, India’s two leading producers of the foodgrain.

Apart from direct supply of wheat from the procurement centres to consuming states like Maharashtra and Gujarat, the public sector agency has encouraged private investment in warehouses through the Private Entrepreneur Godown (PEG) Scheme. Under this scheme, FCI ensures full occupancy of warehouses until the investor achieves breakeven level. The scheme received good response in Haryana and Punjab as FCI estimates two million tonnes (mt) of new storage capacity will be created by March.

While investors in Punjab are building 1.2 mt of storage space, which would be handed over to FCI soon, in Haryana, too, 0.49 mt of new capacity is scheduled to be created by the end of this month.Currently, the two states have storage capacities of 20.5 mt and 2.7 mt, respectively, under FCI’s supervision, in both covered godowns and open plinths.

Additionally, the grain procurement agency has also intensified direct milling of paddy, chiefly in order to create space for fresh wheat stocks. Instead of paddy storage, FCI plans to stock rice, which occupies one-third space compared to paddy. “The situation would be difficult for handling procured foodgrain during this season as Punjab and Haryana are estimated to reap a bumper crop this year. Various efforts are underway to tackle the situation,” said an FCI official in Chandigarh.

Foodgrain stocks in Punjab are estimated to be 1.4-1.5 mt higher than the mandatory buffer norm in the state as on April 1. Thanks to good paddy production in the state last year, the situation has turned even more serious.

FCI’s foodgrain management policy received all-round condemnation last year due to spoilage from water logging of nearly 100,000 tonnes of paddy stored in open plinth. The corporation is making efforts to avoid a repeat this year.

In an intensified milling effort, FCI has milled around 37.7 per cent of the total paddy procured as on March 1 this year, compared to 24.2 per cent milled until the same time last year. The agency has directly transported 0.75 million tonnes of wheat to various consuming destinations from procurement centres in Punjab.

However, they maintain measures are underway to ensure adequate storage is available for wheat in the coming season.

Besides faster transportation of stored foodgrain through rail and road, FCI officials maintain they are eyeing the space with rice millers, available after milling of paddy.

Since storage required for rice is almost one-third that of paddy, faster conversion of paddy to rice would ensure more space for storage of wheat . Till April, FCI plans to mill another 20 per cent of the stored paddy, thus, creating additional space for wheat. Offtake of existing stock has also improved.

FCI officials in Haryana say the offtake for storage stock of paddy and rice has increased in the past few months. Compared to offtake of 1.09 tonnes of wheat and 0.03 tonnes of rice in February, the total offtake was 0.58 tonnes of wheat and 0.02 tonnes of rice in November.

Similarly, in Punjab, 1.42 mt of stock till now has been liquidated as against an average of 1.2 million tonnes in the past three months preceding February.

While Punjab is eyeing production of 16.7 mt, wheat production targeted by Haryana is 11.8 mt. FCI is looking to procure 11.5 mt of wheat in Punjab this year, as against 10.95 mt procured last year. In Haryana, FCI officials maintain the target is seven mt. FCI officials estimate total inventory to be 2.2 mt on April 1, against 1.87 mt last year.