India's Innovative Approach to Tackle Wheat Shortage: Relaxed Procurement Norms to Replenish Stocks

The world's second largest wheat producer wants to purchase 34.15 million tonnes of new-season wheat from local farmers to replenish state stocks after purchases fell 53% to 18.8 million tonnes last year due to a bad harvest.

New season wheat has begun to arrive on the market, but the harvest has lost lustre in some places due to recent rainfall, according to a senior government official who declined to be identified.

"We have permitted the state of Madhya Pradesh to obtain wheat with a 10% reduction in lustre. We would entertain calls for other states and characteristics such as moisture if necessary," according to the official. In accordance with official protocol, the source declined to be identified. Madhya Pradesh is the second largest wheat producer after Punjab.

Wheat crops in Punjab and Haryana have also been harmed as a result of recent rains, and the government would be obliged to make similar modifications in procurement laws for these states, according to a New Delhi-based trader with a global trade firm. In 2022, Punjab, Haryana, and Madhya Pradesh accounted for more over 98% of total wheat procurement.

Harvest with poorer lustre was being sold at a significant discount to good quality crop in the market, and the merchant predicted that government buying would put an end to this distress sale. As of April 2, state-run agencies had purchased 260,000 tonnes of wheat from farmers, up from 46,000 tonnes the previous year, according to another government official.

"Buying would pick up steam in the coming weeks. Because of the rain, it did not gain the needed momentum. Buying would pick up steam in the coming weeks. Because of the rain, it did not gain the needed momentum," according to the official. To manage the world's largest food assistance programme, the government-backed Food Corporation of India (FCI) buys wheat from farmers at state-set prices.