The fully-mechanised government procurement center in Madhya Pradesh’s Dewas district can process around 2,000 metric tons of wheat per day. But in the peak of the wheat procurement season, only a handful of farmers are present here — in a year harvest has been largely unaffected.
Among them is Vijay Patel, his red tractor-trolley loaded with 145 quintals of wheat. His variety, ‘Tejas’, was going for around Rs 1,900/quintal in private mandis, below this season’s MSP of Rs 2,015. “So it is better to have sold the produce to the government,” he says.
This year, the state government has procured 34.32 lakh metric tons of wheat between March 28 (when procurement started) and April 29. This is lower than the 44.60 lakh metric tons it procured in April 2021.
It is a different story in private mandis. Stakeholders say arrivals are up by almost 40 per cent over the previous year as farmers throng these centers for higher rates offered by traders. “Some qualities of wheat are fetching Rs 2,500/quintal,” says Patel.
In these private centres, 28.79 lakh metric tons have been sold until April 28 — as against 4 lakh metric tons last year.
Behind this huge jump in private sale is the increase in export demand amid Russia’s invasion of Ukraine — an event that has rocked supply through the world.
Farmers in Madhya Pradesh are now getting up to Rs 2,500/quintal of wheat in private mandis as against the Rs 2,015 MSP.
“Traditionally India would supply wheat to countries like Bangladesh, Sri Lanka, Philippines. But this year India will also be supplying to markets in Egypt, Turkey. The farmers are likely to get anywhere between Rs 2,300 to Rs 2,500 per quintal for wheat,” said one exporter.
Another factor working in the favor of the Madhya Pradesh farmer is the heatwave that is expected to affect the wheat yield in Punjab and Haryana. Madhya Pradesh has not been affected in this regard as it harvests its wheat crop earlier — around mid-March (sowing begins around October 15). Some farmers, like Bharat Singh, explaining that fog-like conditions after sowing and the lack of chill in February impacted the harvest and per acre yield fell from 32 quintals to 27 quintals.
But production has remained largely unaffected — the estimate is 347 lakh metric tons against 350 lakh metric tons. The area under cultivation has also gone down marginally — from 98 lakh hectares last year to 96 lakh hectares this year.
But the exporter quoted above that exports will be stretched around June amid rising and low supply, especially considering the situation in Punjab and Haryana.
Back at the Dewas procurement centre, operated by the Adani Agri Logistic Dewas for the Madhya Pradesh government, manager Ventak P says an average of 700 quintals has been procured per day, far below capacity.
MP State Civil Supplies Corporation (MPSCSC) undertakes procurement in the state on behalf of Food Corporation of India.
Senior officials from the state feel that the slow pace of government procurement is likely to continue with the state managing to procure, at best, 55-60 lakh metric tons over the next 20 days before the procurement cycle for this year ends on May 15. Officials also said procurement dates might be pushed further.
With the rise in demand, the MP government, which has a stock of 100 lakh metric tons against its need of 30 lakh metric tons, set out to sell the surplus stock. It sold 6.45 lakh metric tons at the rate of Rs 1877 per quintal in November, but after the demand picked up amid the Russia-Ukraine crisis, the prices of wheat in the international market soared. The state sold two lakh metric tons at the rate of Rs 2,064 per quintal, and another lot of 3.8 lakh metric tons for Rs 2,058.
The Madhya Pradesh government had procured 128 lakh metric tons in 2021-22, 129 lakh metric tons in 2020-21 and 73 lakh metric tons in 2019-20. With an expected procurement of about purely 55-60 lakh metric tons by the end of season, it would be the lowest procurement in the past five years.
“The state government needs around 30 lakh metric tons of wheat which have already been procured and by the end of the procurement cycle, we would have procured double the need of the state. In such a scenario, farmers turning to mandis where they are getting rates above MSP is welcome,” said Faiz Ahmed Kidwai, Principal Secretary, MPSCSC.
Officials point out that the 128 lakh metric tons and 129 lakh metric tons procured in the last two years were an anomaly — the pandemic hardly left any option for the farmers to turn to mandis for private trade.
This year, though, many farmers have unlocked to private mandis. Among them is Ghanshyam Choudhary, from Ashta in Sehore district, who waited for two days at Ashta mandi to sell 60 quintals of the ‘1544’ variety of wheat. “I got Rs 2,100 last year for the same variety of wheat in the mandi. But this year, I got Rs 2,400 per quintal.”
Choudhary, who harvested 120 quintals of wheat on his 12 acres, has only sold half his produce so far and is hoping to take the remaining stock out after observing the fluctuations at the market rate.
Sameer Bhargava, president of Sironj mandi in Vidisha said the arrivals at Sironj mandi have been the best ever in the current procurement season. “The highest arrival in our Sironj mandi was 16,000 quintals. This season, it has recorded arrivals to the tune of 30,000 quintals.” He said all mandis across MP, like Sironj, are witnessing at least 40 per cent higher arrivals this year.
Harish Gyanchandani, President of Bhopal Anaj Mandi said mandis are witnessing a nearly three-fold rise in arrivals. As per Gyanchandani, the Bhopal mandi, which has a capacity of 5000 quintals of wheat, is getting roughly 20,000 quintals per day.
Mukesh Patel, another farmer from Dewas, said that apart from the high rates in mandi, another driving factor for farmers is the instant payment. “I sold 150 quintals at the government procurement center on the MSP of Rs 2015 on April 6, but I’m yet to receive the payment for it. There is an ongoing wedding season, and we farmers want instant cash. With the rates good and instant payment, why not sell at mandis?”