fnbworld bureau/New Delhi
Can too much be too less? Certainly, this seems to be the case for India. A supposedly poor country that has excess of everything - be it poverty, wealth, illiteracy or the number of IT tycoons. Fathom this. The Indian granaries are overflowing with stocks of wheat and rice far exceeding their buffer storages. While this year, wheat production is likely to be a near-record 78 million tonnes. The wheat stocks in the central pool on February 1, 2009 are estimated to be 20.19 million tonnes, while rice stocks are estimated to be 16.77 million tonnes.
According to a recent editorial in the Financial Express newspaper, wheat stocks on April 1, 2009 are expected to be around 10.31 million tonnes, far above the year-ending buffer requirement of 4.0 million tonnes, while rice stocks on October 1, 2009 are projected to be 5.91 million tonnes, more than the norm of 5.2 million tonnes. High inventories have already created a storage problem for Food Corporation of India (FCI). The storage will continue to be a problematic issue when the new rabi procurement starts from April 1.
The FCI will need additional storage space for more than 4.3 million tonnes in Punjab and 4.4 million tonnes in Haryana for the new wheat stocks. The cost of creating additional sarkari storage is high. The government should, therefore, first ease the two-year-long ban on wheat and wheat product exports and, second, relax the stock limit and disclosure norms for private traders.