India’s Wheat Procurement Falls Short, Panjab & Haryana Contribute 75% to Stocks

As of 12 May, wheat procurement has reached 25.30 Metric Ton (MT), compared to 25.68MT in 2023. This falls short of the govt’s procurement target of 37.29MT for this year. In the past, the govt. procured 26.20MT of wheat in 2023, 18.79MT in 2022, and a record 43.34MT in 2021. Procurement in Madhya Pradesh (MP) has decreased by 35% to 4.4MT from 6.8MT but has doubled in Rajasthan (RJ) to 0.7MT from 0.3MT. In Uttar Pradesh the production quadrupled to 0.81MT from 0.18MT. Both MP and RJ offered a bonus of ₹125/quintal on top of the minimum support price (MSP) to encourage farmers to sell wheat. In Panjab (PB), wheat procurement has reached 12.2MT, a 2% increase from last year’s 11.9MT, despite an initial target of 13MT. Haryana (HR) has procured 7.05MT, up 12% from 6.2MT last year. Amid El Niño and the govt. stocks at a 16-year-low, PB and HR have once again contributed 75.5% to Indian wheat stocks. In 2015-16 as well, these two states contributed 75.8%. Till the mid-2000s, PB and HR contributed 90% or more of the wheat for feeding the public distribution system (PDS) and other govt. programs. With the technology spreading to other states, and their govts. also establishing infrastructure for buying grain at MSP from farmers, PB's ratio dipped to roughly 65% by the early 2010s. The decline in procurement is attributed to private players buying wheat and bigger farmers holding onto their stock in anticipation of higher prices (SDW Vol. 2 Issue 19, Story 7).