The Indian government announced yesterday that it has procured a record 207.10 lakh tonne of wheat for the public distribution system (PDS) in the current season on the back of higher support price to the farmers, a development that will help it combat high inflation. This is the highest wheat procurement since independence.

The earlier record of wheat procurement was 206.3 lakh tonne achieved in 2001-02. The total procurement was 111.2 lakh tonne last year as against the targeted 150 lakh tonne. This had necessitated imports, something which has been ruled out by the government this year. The target for this year was kept unchanged at 150 lakh tonne.

The government had taken a host of measures to ensure adequate wheat procurement. Apart from raising the procurement price from Rs850 to Rs1000 a quintal (100 kilograms), it has banned export, imposed compulsory declaration for private purchases exceeding 10,000 tonne.

The higher procurement is attributed to a higher minimum support price (MSP), as well as to multinationals and private trade buying a much lower quantum than in the previous two years. Also, some of the States which did not contribute to the central pool, in the previous years, sent substantial quantities this year. The government's wheat procurement was also helped by a record production, estimated at 768 lakh tonne.

The highest procurement has been in Punjab at 98.43 lakh tonne, followed by Haryana (52.01 lakh tonne), Uttar Pradesh (22.9 lakh tonne), Madhya Pradesh (18.7 lakh tonne), Rajasthan (8.72 lakh tonne), Bihar (2.07 lakh tonne), and Gujarat (3.41 lakh tonne).

According to the Food Corporation of India (FCI), the nodal agency for procurement and distribution of food grains under PDS , the government will continue to procure wheat at Rs1000 a quintal till the end of the season on 15th June Going by the arrivals at the FCI and other agencies, the government expects to procure up to 215 lakh tonne by that date.

"This year, we are expecting wheat purchases to reach 215 lakh tonne," FCI chairman and managing director Alok Sinha said. Attractive MSP is the main reason for the record purchases, he said, adding that farmers are also satisfied with the arrangements made by FCI which led to 91 per cent procurement of market arrivals this year.

Thanks to the record procurement, the price of wheat should moderate in the open market, FCI sources said. It is hovering between Rs12 and Rs13 a kg at present. Moreover, the pressure of inflation may also ease, considering that the commodity has a weight of 1.38 per cent in the wholesale price index (WPI).