The clearance currently is required only for Lalitpur, where procurement was among the lowest in the state this season, but traders fear it could be extended to other districts as well if the overall numbers remained low.
However, the Lalitpur district collector said the administration issued the April 12 order after it found out that private traders were buying wheat at below minimum support price (MSP). “After verification of their documents, we will allow them to use railway rakes,” Aalok Singh told ET.
UP is the nation’s largest producer of the staple grain, but last year it was fourth in contribution to the central pool – after Punjab, Madhya Pradesh and Haryana – with its share shrinking to 1.7% from 13% the year before.
Strong export demand amid a global shortage due to supply disruptions from Russia and Ukraine had led private traders including multinationals to increase wheat purchase from Indian farmers, paying more than the MSP. This resulted in government procurement falling to 18.79 million tonnes (MT) in the 2022-23 rabi marketing season, less than half compared with the previous season’s 43.34 MT.
With market conditions remaining similar, and predictions of a possible drought in India this year, the government doesn’t want a repeat of last year that could affect its efforts to ensure food security for the poor, especially with general elections just a year away. Sources said it was easier for private companies to buy from UP as the government procurement system was not as efficient as it was in Punjab or Haryana.
The government in 2022-23 procured just 3,36,000 tonnes of wheat from UP, compared with 5.64 million tonnes the previous marketing season.Industry sources said currently the private trade was buying wheat in UP at full speed and that the warehouses in the state were fully booked.
As the quality of wheat from Rajasthan has deteriorated due to rainfall, all the stockists and bigger players have now turned to UP and Bihar,” said Navneet Chitlangia, senior vice president of the Roller Flour Millers’ Federation of India.
The state is trying to address the issues, but challenges remain.
Authorities are setting up more procurement centres. The Lalitpur district in the Bundelkhand region currently has 46 such active government facilities, all opened after April 1.
“However, farmers are not coming to government centres,” said a top official of the district administration who did not want to be named. “The private traders are exploiting the poor farmers. The traders lay a trap to get wheat from poor farmers by paying some advances to them. We will check at what price they have purchased the wheat from farmers, if the wheat has been procured from farmers after paying the mandi taxes.”