Policy Imperatives for Wheat Procurement

Abstract

Wheat is an important staple food grain in India ensuring food and nutrition security accounting for 21 per cent of calorie and 20 per cent of protein intake. The nutri-rich cereal is under cultivation in around 30 million hectares with an annual production over 100 million tonnes in the recent past with 33 per cent being procured by the state. Being a ‘critical staff of life’ for vast populace, wheat procurement and pricing strategy holds immense significance in an agrarian economy like India. Policy imperatives on procurement and pricing have an important role not only in spurring production and consumption but in accelerating the pace of economic development. The support program eases the availability and access of food to the poor and vulnerable section. However, there is a view that cost of the support program has been mounting and remains a burden to the government exchequer. The counter view is that the cost pales into insignificance compared to the production subsidy offered by the state in the US, Europe and Japan. A policy document covering the issues in and with alternatives to wheat procurement can provide insights and inputs to the stakeholders concerned for consideration in decision making. Under changing realm of economic activities, balancing and nuancing the conflict interests among stakeholders need considerable attention and utmost importance in decision making. The present policy document will be the harbinger of the series initiated at ICAR-Indian Institute of Wheat and Barley Research and the first of the publication from the series highlights the economic importance and core issues in procurement, extant price policy along with policy alternatives for strengthening the wheat value chain.

Keywords: Wheat, Procurement, Minimum Support Price, MSP, Price Policy, Staggered Procurement, Policy Imperatives

JEL Classification: Q13, E64, H53, H57