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Low procurement stares depleted silos

FOOD MANAGEMENT: Foodgrain stock at 19.2 MT on January 1 this year is 4% lower than the buffer norm of 20 MT. The Economic Survey 2007-08 points to the lower than normative foodgrain stocks for the third consecutive year, caused mainly by the decline in procurement of wheat and rice and their increased offtake under the targeted public distribution system. The foodgrain stock stood at 19.2 million tonnes (MT) as on January 1, 2008, comprising 11.5 million tonnes of rice and 7.7 MT of wheat, respectively. This stock is 4 per cent lower than the buffer norm of 20 MT. Last year, only wheat stock was short of buffer norm. While wheat stock of 7.7 MT is 500,000 tonnes lower than the required norm, the rice stock stood at 11.5 MT, that is 300,000 tonnes lower than the norm. According to the survey, the main reason behind the decline in stocks was due to lower procurement in both wheat and rice. The survey attributes the decline in wheat procurement to low production, lower market arrivals, high market ruling prices, negative market sentiments due to low stocks in the central pool, and aggressive purchase by the private traders. It acknowledges that the increase in government procurement price by Rs 150 a quintal during the 2007-08 marketing season helped wheat procurement to a small extent. The procurement rose by 20.65 per cent to 11.1 MT but the government had to contract imports of 1.8 MT at high rates to meet the consumption requirement. This was the second consecutive year of wheat import. However, rice procurement also fell marginally to 26.3 MT during 2006-07 from 26.7 MT during 2005-06. However, in the ongoing 2007-08 season, procurement till December has been marginally better than the previous season's corresponding purchase. The increase in paddy procurement price by Rs 125 a quintal has helped rice availability in the central pool this year. The regulation of rice export by putting a price cap has also contributed. The offtake of both wheat and rice increased marginally in the April-December period of 2007-08. Wheat offtake during the period was 8.2 MT (against 7.7 MT in the previous year's corresponding period) while the rice offtake was 16.7 MT (versus 15.9 MT in the year before).