Wheat procurement surges, giving govt breathing room on food grain aid

Mint

19-06-2025

New Delhi: The Centre is confident of maintaining wheat-rice allocations under its Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY) this year, buoyed by strong wheat procurement — a politically sensitive development ahead of key state elections, according to two officials familiar with the matter.
Under PM-GKAY, 813.5 million beneficiaries receive 5 kg of free food grains each month—currently split as 2 kg wheat and 3 kg rice—translating to an annual wheat requirement of around 19.5 million tonnes (mt). Wheat procurement in the 2025–26 Rabi marketing season (April–June) has already crossed 30 mt, nearing the government's target of 33.37 mt, according to data from the Food Corp. of India (FCI) data.
'We have enough stock to meet the requirement, and it will continue through the year," said one of the officials cited earlier, adding that adequate stocks would also allow for market interventions if prices rise.
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As of 31 May, wheat stocks in the central pool stood at 37.99 million tonnes, comfortably above the buffer requirement of 27.58 million tonnes set for 1 July, according to official data.
The timing is crucial as assembly elections approach in Bihar this November, while legislative polls in West Bengal are due in March 2026, with subsidized food aid remaining a politically potent issue in both states.
The robust procurement comes after two years of shortfalls that forced the Centre to slash wheat allocations and replace them with rice—only restoring the original ratio in September 2024.
In May 2022, wheat quotas under the National Food Security Act (NFSA) were cut for 10 major states—Bihar, Jharkhand, Odisha, West Bengal, Delhi, Uttar Pradesh, Gujarat, Maharashtra, Madhya Pradesh and Tamil Nadu. These states collectively account for nearly 67% or 551 million of the 813 million poorest beneficiaries covered under NFSA. At that time, all beneficiaries received only rice for their 5 kg monthly entitlement.
This year's rebound is driven by improved production prospects. The government expects wheat output to rise 2% to a record 115.4 million tonnes (mt) in the 2024-25 Rabi season, mainly on account of higher acreage.
According to official data, procurement stood at 26.6 mt in 2024-25 and 26.2 mt in 2023-24, far above the sharp drop to 18.8 mt in 2022-23. The highest ever procurement remains 43.3 mt in 2021-22.
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Much of this season's surge has come from Punjab (11.92 mt), Haryana (7.14 mt) and Madhya Pradesh (7.77 mt), where state governments offered additional bonuses over the Centre's minimum support price (MSP) of ₹2,425 per quintal. Madhya Pradesh announced a ₹175-per-quintal bonus, while Rajasthan, which procured 2.09 mt, offered ₹150.
Procurement from Uttar Pradesh, India's largest wheat producer, has reached 1.02 mt so far, against an initial estimate of 3 mt.
States like Bihar, Uttarakhand, Himachal Pradesh and Gujarat saw minor participation. Procurement remained nil in Maharashtra, Delhi and Jammu & Kashmir.
Arrivals are still being monitored, particularly in eastern states where procurement is typically backloaded, the second official said, adding that final numbers could rise in the coming weeks.
Price stability in focus
The procurement uptick also gives the government a buffer to contain price pressures, which remain a concern amid rising mandi prices in some regions.
Wholesale price index (WPI) inflation fell to a 14-month low of 0.39% in May, but wheat prices have shown modest firming. As of 18 June, the average retail price of wheat stood at ₹31.32 per kg, up 1.2% from a year earlier. Wheat flour (atta) prices rose 1.5% year-on-year to ₹36.65 per kg. Wholesale wheat prices rose 2.7% year-on-year to ₹28.20 per kg.
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'Wholesale and retail wheat prices have remained firm in some states due to high mandi prices, but with strong procurement, market prices should ease soon," the second official added.