Punjab’s problem of plenty goes against the grain - Hindustan Times
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Punjab’s problem of plenty goes against the grain

Hindustan Times, Chandigarh | By
Feb 22, 2020 05:52 PM IST

TO THE BRIM Set for a bumper wheat crop in less than two months, state urges Centre to increase monthly grain outflow, move stock outside

CHANDIGARH: Punjab stares at a problem of plenty with a bumper wheat procurement season less than two months away.

Workers stacking bags of wheat at an open godown in Patiala district on Saturday.(Bharat Bhushan/HT)
Workers stacking bags of wheat at an open godown in Patiala district on Saturday.(Bharat Bhushan/HT)

Piles of wheat and paddy stored in the state’s godowns have become a cause of worry not only for the state and central governments but also for farmers who now know that their produce is not in demand.

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During his visit to Punjab last week, Union minister of state for consumer affairs, food and public distribution Raosaheb Patil Danve tried to allay fears by announcing that the Centre will set up 31 silos in Punjab in a shift from traditional storage to a scientific system. The announcement, however, won’t ease the situation immediately.

NO SPACE FOR MORE

There is literally no space to store more grain.

The wheat harvested and paddy shelled two years ago is still in the state’s godowns. Policy makers are suggesting a stop to open-ended procurement, which means state agencies won’t buy as much grain that arrives for sale. This is a break from the practice since the minimum support price (MSP) was introduced five decades ago.

The proposal puts the government in a spot. Chief minister Capt Amarinder Singh, the state food and civil supplies department and farm bodies have raised a red flag, urging the Centre to look for options to move the foodgrain stock outside the state and carry on with the procurement system as usual.

STATE SEEKS FCI HELP

There are 590 lakh tonnes of foodgrain stored in the country, of which Punjab’s godowns cater to one-third with a capacity of 180 lakh tonnes. The foodgrains are stored in open plinths, covered godowns and silos.

A bumper crop is expected in the coming Rabi season with the total arrival expected to touch 135 lakh tonnes. “Most of the upcoming wheat crop will go in open storage,” a food department officer said, requesting anonymity.

The monthly movement from Punjab to consumer states has crashed to all-time low of 7.5 lakh tonnes (of wheat and paddy) against the previous average of 18 lakh tonnes, which has contributed to the situation in Punjab.

“We have asked Food Corporation of India to increase the monthly grain outflow to at least 12 lakh tonnes so that we can get free space to manage our stocks,” says agriculture director Anandita Mitra.

MISMANAGEMENT, SAYS EXPERT

Food policy analyst Devinder Sharma attributes the present situation to mismanagement. “Silos should come up at the earliest. Proposals are hanging fire for years. We should take storage out of the producing state so that logistics are not a burden on Punjab and the state doesn’t get penalised for rotten grain.

“Our country is 102nd out of 117 countries on the global hunger index. What’s the use of surplus food stocks when people are hungry?” he says, suggesting that the quota of foodgrain under the National Food Security Act (NFSA) be increased from 5kg a month to 8kg.

He sees the scenario as a ploy by the government to end the MSP regime.

The Punjab government has suggested to the Centre to give foodgrains for six months in advance to NFSA beneficiaries to ease stocks.

RBI RIDER A BIGGER WORRY

For Punjab, there’s a bigger worry, as the Reserve Bank of India has put a rider on the release of the cash credit limit (CCL) for the ensuing procurement of wheat. It says if the wheat stock of 2018 is not cleared and the CCL received does not match, fresh CCL will not be released.

“We are in a tight situation. We procure foodgrain on behalf of the Centre but when it is not lifted by the FCI for public distribution, it reflects as a gap in RBI ledgers,” says state foodand civil supplies minister Bharat Bhushan Ashu.

According to state principal secretary, food, KAP Sinha, the state has got an extension from the Centre till March 2021 for clearing wheat stocks of 2018-19.

“But that’s not the solution, we want a permanent solution. The backlog is seen as gap,” he says.

The state is planning to make a proposal for CCL of Rs 30,000 crore for the coming wheat procurement season.

VAGARIES OF WEATHER

At least 2,000 tonnes of wheat of 2018 lying in the covered area plinths (CAP) has been declared damaged. There will be more damaged grain as state (procurement) agencies are conducting surveys in all godowns where 90 lakh tonnes of wheat is stored. Of this, at least 40 lakh tonnes is in CAP and vulnerable to vagaries of the weather. CAP storage is in the open, on a raised platform and covered with a tarpaulin.

Punjab has decided to construct more CAP storage area for 33.5 lakh tonnes of wheat but due to the lukewarm response, it may not add the planned space before the start of procurement on April 1. “New storage may get restricted to half,” says the food department official.

STORAGE COST

Storing a quintal of grain for a month in covered godowns costs the state Rs 7 and Rs 5 in open plinths. Going by the stocks in state godowns, Punjab spends Rs 130 crore every month on storage alone. The state gets a reimbursement of Rs 9.36 per quintal for a month in covered storage from the Centre, while the reimbursement for CAP-stored grain is Rs 2.4 per quintal.

HOW IT ALL ADDS UP

260 lakh tonnes: Existing storage capacity. This comprises 155 lakh tonnes covered godowns; 100 covered area plinths (CAP); and 5.75 lakh tonnes in silos

33.5 lakh tonnes: More CAP storage sought by Punjab, but state may not get it due to lukewarm response from private players

180 lakh tonnes: Foodgrains already stored in godowns of the state

135 lakh tonnes: More wheat to arrive in rabi marketing season

7.5 lakh tonnes: Monthly movement of wheat and paddy from state against past average of 18 lakh tones, resulting in the stock pile-up

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  • ABOUT THE AUTHOR
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    Gurpreet Singh Nibber is an Assistant Editor with the Punjab bureau. He covers politics, agriculture, power sector, environment, Sikh religious affairs and the Punjabi diaspora.

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