Punjab to face storage problem

Tuesday, 10/04/2012


The Baisakhi season may not bring much cheer to various government agencies procuring wheat in Punjab and Haryana. Grappling with the problem of storage space in view of the slow movement of wheat and paddy from these states and faced with yet another bumper harvest, the agencies would face a tough task in storing the additional wheat to be procured by them.

The wheat arrival is expected to begin only after Baisakhi, the state government's procurement agencies as well as the Food Corporation of India would face a tough task with 115 lakh metric tonnes of wheat expected to arrive in mandis of Punjab and 70 lakh metric tonnes of wheat expected to be procured by various agencies in Haryana. The godowns in the two states are already full to their capacity with the produce from last year having not been moved to the recipient states.

Sources inform The Tribune that the total storage capacity in the state is 200 lakh metric tonnes. Already 51 lakh tonnes of wheat and 67 lakh tonnes of rice are lying in the state's godowns. With the state expected to procure another 115 lakh tonnes of wheat, it would have no space to store 32 lakh tonnes of the new wheat.

Similarly in Haryana, the total food grain storage space is 90 lakh tonnes, of which 48.55 lakh tonnes is covered. But again the godowns are filled with 56 lakh tonnes of wheat, 12 lakh tonnes of rice and 90,000 tonnes of bajra in the godowns. With 70 lakh tonnes of wheat crop likely to be procured in this season, Haryana, too, will face a shortage of space to store the new grains.

In the past three years, a little has been done to increase the food grain storage space in the two states. While Haryana has added only five lakh metric tonnes of new storage space, Punjab has added 12 lakh metric tonnes of new storage space till March this year. This is woefully less than the required space, and not even in consonance with the increase in crop production each year.

What has made the matter worse is that more than 90 per cent of the total wheat produced in the two states will have to be purchased by the state procurement agencies as well as the FCI. This is mainly because of the high taxes on wheat being purchased by private traders, who have shunned the two states for buying wheat. As against the MSP of Rs 1,285 per quintal, a private trader has to cough up Rs 1,450 to Rs 1,500 per quintal in case he buys wheat from here, after including purchase tax, commission of commission agents and other expenses. He then finds it favourable to buy the crop from neighbouring Uttar Pradesh, where the wheat is sold, sometimes at prices below the MSP.

Bumper harvest

The total storage capacity of Punjab is 200 lakh metric tones

Already 51 lakh tonnes of wheat and 67 lakh tonnes of rice are lying in the state's godowns

The state government is expected to procure another 115 lakh tonnes of wheat. It would have no space to store 32 lakh tonnes of the new crop

NABARD to extend financial support

The NABARD is likely to extend financial support of Rs 500 crore to Punjab under the NABARD Warehousing (Refinance) Scheme, 2012. Under this initiative, the NABARD extends financial support to banks at a concessional rate of eight per cent for setting up warehousing facilities in the state. "The scheme was launched in September last year and we extended financial support of Rs 245 crore to banks in Punjab, which will help create 6.7 lakh metric tonnes of new storage capacity. This year, we are likely to double this line of credit. Interest subvention of 1.5 per cent is also given to those who make timely payments and those completing the warehouses on time," said Krishan Jindal, chief general manager, NABARD.

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