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Gujarat and Uttar Pradesh — both BJP-ruled states — have demanded more wheat in place of rice and asked the Centre to restore their original allocations under the National Food Security Act (NFSA), 2013, or change the wheat-rice allocation ratio that was revised by the Union Food Ministry in May.
What was this revision?
On May 14, Food Secretary Sudhanshu Pandey announced that “after consulting with the states”, the Centre has reallocated some quantities by changing ratios of wheat and rice under the NFSA. For example, states getting wheat and rice at a 60:40 ratio will now get it at 40:60, while those getting allocations at 75:25 would now get these at 60:40. States where rice allocation has been zero will continue to get wheat. For small states, NE states and special category states, allocation has not been changed. According to the Food Ministry, the move would save about 61 lakh tonnes of wheat over the remaining 10 months (June-March) of the current financial year.
On May 4, the Centre had also announced a cut in wheat allocation under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) for the remaining five months until September. That cut is estimated to save 55 lakh tonnes of wheat. An equal quantity of rice has been allocated to compensate for the wheat.
Which states are affected by the revision?
Wheat allocation under NFSA was revised downward for 10 states: Bihar, Jharkhand, Odisha, West Bengal, Delhi, Uttar Pradesh, Gujarat, Maharashtra, Madhya Pradesh and Tamil Nadu. These states account for about 55.14 crore (67%) of the 81.35 crore beneficiaries under the NFSA.
Gujarat and Uttar Pradesh, which have demanded restoration of their original allocations, are primarily wheat-consuming states. Earlier, UP was receiving 3 kg wheat and 2 kg rice per person per month under the NFSA, which now changes to 2 kg wheat and 3 kg rice. Gujarat was getting 3.5 kg wheat and 1.5 kg rice per person per month, which now changes to 2 kg wheat and 3 kg rice.
After the revision, the combined monthly wheat allocation of these 10 states comes down to 9.39 lakh tonnes from their current allocation of 15.36 lakh tonnes. These states will be provided additional rice equal to the cut in wheat allocation.
The NFSA provides that “in case any state/UT’s allocation under NFSA is lower than their current allocation, it will be protected up to the level of average off-take under erstwhile normal TPDS during 2010-11 to 2012-13”. This additional quantity of foodgrains is called the ‘tide over’ allocation.
A cut has been announced in the ‘tide over’ allocation of wheat for Uttarakhand, Kerala and Tamil Nadu. This adds up to about 1.13 lakh metric tonnes. After the revision, their “tide over” wheat allocation would become nil.
What are the consumption trends?
Generally, there has been a gradual decline in per capita cereal consumption in India. As per the National Sample Survey Office’s (NSSO) Household Consumption of Various Goods and Services in India, 2011-12 report (the last one that has been published), rice consumption per person per month has fallen in rural India from 6.38 kg in 2004-05 to 5.98 kg in 2011-12, and in urban India from 4.71 kg to 4.49 kg. Wheat consumption, which was 4.29 kg in rural areas and 4.01 kg in urban areas during 2011-12 (July-June), had risen by about 0.1 kg per person per month since 2004-05 in rural areas and fallen 0.35 kg in urban areas.
Among the 10 states where the allocation has been revised, five — Bihar, Jharkhand, Odisha, West Bengal and Tamil Nadu — had a higher rice consumption than the all-India average (rural: 5.976, urban: 4.487 kg/person/month) in 2011-12. It was lower than the national average in the remaining five states.
As for wheat, against the national average monthly per capita consumption of 4.288 kg (rural) and 4.011 kg (urban), consumption was higher in Uttar Pradesh, Madhya Pradesh, Bihar, Delhi and Maharashtra; and lower in Odisha, West Bengal and Tamil Nadu. In Gujarat and Jharkhand, it was lower than the national average in rural areas and higher in urban areas.
Why has the wheat allocation been cut?
The main reason is lower procurement than last year. During the current rabi marketing season (RMS 2022-23) 187.89 lakh tonnes wheat has been procured till July 4, which is 56.65% lower than the 433.44 lakh tonnes wheat procured in the entire RMS 2021-22. This has been the trend across Punjab, Haryana, Madhya Pradesh and Uttar Pradesh, the states that contribute the most to the country’s food basket.
The wheat stock in the central pool has dwindled to its lowest level in 14 years. It stood at 311.42 lakh tonnes on the first day of June, the lowest since 241.23 lakh tonnes in 2008. On June 1 last year, it was 602.91 lakh metric tonnes.
As per the Foodgrains Stocking Norms of the Food Corporation of India, a stock of 275.80 lakh tonnes has to be maintained on July 1 every year. While official figures for the existing stock have nor yet been released, sources said the stock has further depleted.
Why has procurement fallen?
Domestically, the major reason during the current season is lower production. The Third Advance Estimates of Production of Foodgrains for 2021-22, released by the Ministry of Agriculture and Farmers’ Welfare on May 19, put wheat production at 106.41 million tonnes, which is lower than the target of 110 million tonnes and last year’s production of 109.59 million tonnes. Earlier, the government had estimated production would reach 111.3 million tonnes but due to a rise in temperature in late March affecting crops, the estimate was revised downward to 106.41 million tonnes. Out of 187.89 lakh tonnes wheat procured during the current rabi market season, about 75 lakh tonnes contains shrivelled grains.
Globally, wheat prices have gone up following the supply disruption caused by Russia’s invasion of Ukraine. Besides, adverse weather has affected the wheat crop across several countries including in the European Union region, the United States and Canada. All this has fuelled the demand for Indian wheat in overseas markets in recent months.
According to the Food Ministry, about 45 lakh tonnes wheat was contracted for export in 2022-23 till May 12 and 14.63 lakh tonnes was exported in April, which was higher than 2.43 lakh tonnes in April 2021. Export of wheat flour (atta) spiked too. As per the Food Ministry, 95,167 tonnes of atta has been exported in April, compared to 25,566 tonnes in the same month last year. In view of lower production and higher demand outside, domestic traders offered prices higher than the government’s minimum support price and farmers sold their produce to private traders, effectively reducing government procurement.
The government banned wheat export on May 13. The move was aimed at increasing the availability of wheat in the domestic market to bring down prices.
Express Explained, wheat, Gujarat, Uttar Pradesh, BJP, rice, National Food Security Act, NFSA, wheat-rice allocation ratio, Union Food Ministry, Food Secretary, Sudhanshu Pandey
How wide is NFSA coverage?
The NFSA covers 67.21% of India’s population (75% in rural India, 50% in urban). Out of 81.35 crore accepted (upper limit) beneficiaries, 79.73 crore (98.01%) have been identified as on June 2.
There are two type of beneficiaries: Antyodaya Anna Yojana households (entitled to 35 kg foodgrains per household per month) and Priority Households (5 kg per person per month). Rice is provided at Rs 3 per kg, wheat at Rs 2 per kg and coarse grains at Rs 1 per kg.
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