India Will Be Importing Millions Of Tons Of Wheat In 2009

Financial Express reports that wheat procurement may fall in Punjab and Haryana.

(emphasis mine) [my comment]

Wheat procurement may fall in Punjab, Haryana
Charanjit Ahuja
Apr 14, 2009 at 0005 hrs IST

Chandigarh: As wheat harvesting began on Monday in Punjab and Haryana on the auspicious day of Baisakhi, experts say that wheat procurement may be below the target as unseasonal rains have flattened crops dampening hopes of a bumper procurement this season.

Significantly, Punjab and Haryana contribute more than 60% of the foodgrain to the central pool and fall in procurement targets may affect the buffer stock.

Harcharan Singh Bains, media adviser to Punjab chief minister confirmed the damage to crop and said that the Punjab government has sanctioned a relief package of Rs 4.77 crore [960 thousand dollars] as natural calamity relief fund to the farmers in the districts of Amritsar, Sangrur, Ludhiana, Moga, Jalandhar and Fatehgarh Sahib in view of damage to standing crops.

About 18,968 acre crops has been affected out of a total wheat crop sown over an area of 23,400 hectare due to untimely rains and hailstorm between March 20 and April 2 this year according to assessment made by the revenue department.

Balbir Singh Rajewal, president, Bharatiya Kisan Union observed that last year the total wheat harvested from Punjab was 157 lakh tonne and procurement from different mandis was 105 lakh tonne. He said that this year procurement may not go beyond 70 lakh tonne. He said farmers in the state had suffered a loss of at least Rs 800 crore [161 million dollars].

Punjab chief minister Parkash Singh Badal has directed state chief secretary Ramesh Inder Singh and financial commissioner (revenue) Romilla Dubey to ensure immediate disbursal of relief funds to farmers whose crops had been damaged due to bad weather in the state.

Haryana's agriculture minister Harmohinder Singh Chatha said that there were reports of damage to crops and the agriculture department officials were monitoring the situation closely. He said that the rain could delay harvesting in some parts.

However, when contacted director, agriculture, Punjab, BS Sidhu said that there was some damage to crop but "no reports of extensive damage to crops had been received so far". He said that "wheat has been sown in over 34.8 lakh hectare of agricultural land this time. I have checked with various areas in Punjab and the crop has not suffered much damage." [Elections are next month in India. This guy is lying through his teeth.]

Thaindian News reports that Punjab and Haryana farmers resent ban on private wheat trade.

Punjab, Haryana farmers resent ban on private wheat trade
March 31st, 2008 - 4:34 pm ICT by admin
By Jaideep Sarin

Chandigarh, March 31 (IANS) As wheat procurement season starts in north India,
the farming community in Punjab and Haryana, accounting for over 50 percent of the nation's food grain pool, is up in arms against a central government order banning the private sale of wheat. The government recently said private sale of wheat will not be allowed in both states and farmers can only sell their produce to the government. The order came days ahead of the harvesting season.

Farmers' leaders say the order will cause a loss to farmers of Rs.90 billion in Punjab and Rs.60 billion in Haryana - a combined loss of nearly Rs.150 billion ($3.7 billion).

The order came following
apprehension by government procurement agencies that farmers would opt for private sale of wheat at higher prices instead of the government's minimum support price (MSP) being offered at Rs.1,000 per quintal.

Last year,
the procurement of government agencies had fallen short of the target for the country's buffer stock, forcing the government to import wheat at much higher international market rates.

Farmers are getting market value for wheat at Rs.1,600 per quintal from private purchasers. Some farmers have already contracted futures trading with private players who have even offered to pick up the harvested stocks from the fields instead of from the grain markets.

"I have already sold my wheat to a private buyer. There is no going back on my decision. The government has no right to stop me from selling my produce to anyone," Janmeja Singh of Gill village near Ludhiana told IANS.

Private buyers are mostly from the food industry - bread and biscuits makers and their agents. With the food industry growing in recent years, the demand for food grain has also increased.

The official purchase of wheat by government agencies commences April 15 this year. Farmers in Punjab and Haryana are
[were] expected to produce 15 million tonnes and 10 million tonnes of wheat this year. [Now they are expected to produce much, much less.]

Former MP and Bharatiya Kisan Union (BKU) leader Bhupinder Singh Mann is furious with the government for imposing a ban on the sale of wheat to private buyers.

"This ban denies farmers their fundamental right to sell wheat to any one they like or for a better price. This is creating a monopoly for government agencies, which is both illegal and immoral," he said.

"This order is atrocious because it ransacks the fundamental right against exploitation. Clearly scandalous in letter and spirit, this order is primarily aimed to rob farmers and force them to earn less," Mann told IANS.

Farmers say that they are being forced to pay a huge price every year to keep the country's food grain demand in order.

"Why should people who get good salaries not pay for the extra price that farmers are getting from the open market?" asked agriculturist Harjit Singh of Samrala.

Scores of farmers will assemble here Wednesday to protest the government order. The BKU has already written to several chief ministers, MPs from both states and legislators to pursue the matter with the government and save farmers.

Procurement officials say that the government is also justified in disallowing sale of wheat to private players so that government stocks do not fall short of targets.

"We have to think of the country's buffer stocks," one official who did not want to be named pointed out.

Daily Times reports that Punjab likely to ban wheat transportation.

Thursday, April 09, 2009
Achievement of procurement target: Punjab likely to ban wheat transportation
By Nauman Tasleem

LAHORE:
The Punjab government is all set to ban inter-district and inter-provincial transportation of wheat for achieving the procurement target and ensuring availability of roti at subsidised rates, sources told Daily Times on Wednesday.

They said the ban would come into force in the third week of April. Punjab Food Secretary Irfan Elahi said, "There will be no ban, if we get a bumper crop."
[However, there is no bumper crop, so the ban will be in effect]

However,
rains may damage the crop while less availability of fertiliser could result in a low yield.

Sources said one of
the reasons behind the likely ban was the achievement of the procurement target. A senior government official said the federal government had vowed four months ago not to impose a ban on wheat transportation, but the Punjab government had decided to impose the ban to stop the commodity being smuggled out of the province.

Nogger's blog reports about Indian wheat crop being slashed.

Tuesday, 14 April 2009
Indian Wheat Crop Slashed?

Untimely rain, wind & hail storms have hit wheat production in India's second largest wheat producing state of the Punjab, according to media reports. The state is an important one accounting for 44% of the Indian government's domestic wheat procurement in 2008.

The wheat crop in neighbouring Haryana state, also a major wheat producing area, has been badly affected too reports suggest.

Exactly how badly the crop has been affected is open to conjecture. The government is playing things down saying that production in the Punjab may fall 5 percent from 15.7 million tonnes a year ago.

It is well worth noting at this point that
general elections start in India later this month. The government isn't going to be wanting to make any announcements about wheat shortages [agreed], even though it's wheat reserves are said to be more than adequate.

While the state government had estimated wheat production in the Punjab to be around 15 million tonnes,
it would be lucky if production touches 10 million tonnes, according to the President of Bharti Kisan Union (BKU), Balbir Singh Rajewal. He accuses the Union government of 'playing politics' with wheat and rice.

In the midst of harvest
India's antiquated grain storage system is falling apart. Large quantities of wheat are stored outside under plastic sheeting, at the mercy of the elements, pests & disease.

Covered space is currently only available to stack 2.9 million tonnes of food grains, whereas space for 11 million tonnes of food grains - including fresh arrivals onto the market from April 1 - is required, Rajewal says.

"We have the capacity to shell 2 million tonnes of paddy every month but we have curtailed our shelling to the bare minimum as covered space was not available to stack rice. At some places millers stopped shelling completely due to lack of space," said Tarsem Saini, president, Rice Millers Association.

"Millions starve whilst food rots in fields due to inadequate infrastructure" doesn't make much of an election campaign slogan does it?

My reaction: This is pretty scary actually. It looks like there are going to be millions of very hungry and angry people in India this year as food prices rise...

1) India is likely to miss its procurement target as unseasonal rains have flattened crops and destroying hopes of a bumper harvest.

2) Last year, when government procurement agencies fell short of their targets, the government was forced to import wheat at much higher international market rates to ensure availability of bread (roti) at subsidized rates.

3) General elections start in India later this month (explaining why Indian officials are lying about this spring's wheat harvest)

4) While Punjab's director of agriculture has said there were "no reports of extensive damage to crops had been received so far", Punjab's government has sanctioned a relief package ($960,000) as natural calamity relief fund to help farmers whose have suffered extensive damage to their crops.

5) The
central government has recently banned the private sale of wheat in Punjab and Haryana, and farmers will only be allowed to sell their produce to the government.

6) Farmers are getting market value for wheat at Rs.1,600 per quintal from private purchasers, far above the government's minimum support price (MSP) of Rs.1,000 per quintal.

7) Many farmers have already sold their wheat to private players who have even offered to pick up the harvested stocks from the fields instead of from the grain markets.

"I have already sold my wheat to a private buyer. There is no going back on my decision. The government has no right to stop me from selling my produce to anyone,"

8) To stop wheat being smuggled out of the province, The Punjab government is set to ban all inter-district and inter-provincial transportation. (Despite vowing four months ago not to do so)

9) Government officials insist that the ban on private sale and inter-district/provincial transportation are necessary to meet to Procurement targets.

10) India's antiquated grain storage system is falling apart, which is making the situation worse.


Conclusion: India will, once again, be import millions of tons of wheat at much higher international market rates. The rising costs of these imports will undoubtedly force India to scale back its subsidized food policy and millions will go hungry.


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7 Responses to India Will Be Importing Millions Of Tons Of Wheat In 2009

  1. Anonymous says:

    "India Will Be Importing Millions Of Tons Of Wheat In 2009."

    From whom???

  2. Anonymous says:

    No way they scale back on the subsidized food program. Millions would starve... the situation is terrible in Orrisa, Bihar, etc. Government food is the only food for many there.

  3. Anonymous says:

    Hence less gold demand from India, perhaps?

  4. stibot says:

    According to several Internet sources India has 28 mil. hectares of wheat fields.

    Who can expect significant impact from areas like 28 thousands hectares (possibly acres) on India's production?

  5. Anonymous says:

    Stibot,

    for the moment i assume at least one zero droppped off the acre / hectacre figures quoted. But a poor piece of reporting - acres and hectares in same sentence!
    But I take your point, 28,000 hectares is NOTHING in the grand scheme of things.

    Anonymous at 5:30 asks who has spare wheat to sell to India, (if i interpret "From whom???" correctly.)

    Well they could import from:-

    Kazakhstan (loads of wheat, minimal logistics)

    Russia ( loads of wheat, enough logistics, have been aggressively tendering for every worthwhile international deal all season, number one reason why wheat price down)

    Ukraine ( will start harvest in a about 10 weeks - crops have come out of winter well. Might still have old crop from last years big harvest - don't know)

    EU ( plenty of old crop in store - post Xmas exports well down in face of agressive Russian/CIS selling )

    USA (as per EU)

    You pays your money and takes your choice.
    If people go hungry it will not be because of a world food shortage, but rather because those that need it can't afford it.

    Some things never change.

    Farmer John

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