Wheat stocks in government godowns have depleted to their lowest in nine years — which is also the major reason behind the Narendra Modi government’s decision last week to allow duty-free imports of the grain. According to food ministry data, stocks in the Central pool were just under 165 lakh tonnes (lt) as on December 1. Taking an average monthly offtake of 25 lt, there would be opening stocks of only 65 lt on April 1 — below the normative minimum buffer and strategic reserve requirement of 74.6 lt for this date. Moreover, there is uncertainty over the production prospects for the wheat currently being planted in the country. Although sowings have so far been higher compared to last year and the soil-weather conditions, too, are favourable — thanks to a decent monsoon and timely onset of winter — it’s not clear whether lack of cash with farmers post-demonetisation would adversely impact yields, by not allowing adequate or timely application of inputs. At the moment, nobody knows the fate of the crop that would be due for procurement from April 1. The Modi government, it seems, has taken into account both factors — depleting stocks and production uncertainties — while deciding to waive import duty on wheat. Whether this has come a little late and can prove costly in political terms — ahead of Assembly elections in Uttar Pradesh and Punjab — remains to be seen.
