Punjab requests cash credit limit of ₹29,000 crore for purchase of wheat

As the Food and Civil Supplies Department prepares for wheat supply from April 1, the Punjab government has requested a Cash Credit Limit (CCL) of 29,000 crores from the Center.

According to estimates from the state agriculture department, wheat production is expected to top 170 lakh tons this rabi season, of which 135 lakh tons are expected to arrive for purchase by the four state agencies and the Centre’s Food Corporation of India (FCI). In the 2021 kharif season, state agencies had procured 190 lakh tons of paddy.

On the recommendations of the Agricultural Costs and Prices Commission (CACP), the Union Ministry of Agriculture and Farmers’ Welfare has set 2015 per quintal as the minimum support price (MSP) for wheat for the current season, offering an increase of 40 a quintal.

The Union Ministry of Food and Utilities sanctioning the CCL – which will be paid for by a consortium of banks and financial institutions with the approval of the Reserve Bank of India (RBI) – insists that the Punjab government caps purchases at 130 lakh tonnes, the same as wheat purchased in the previous rabi season (2020-21). However, state food department officials said they are making arrangements with liberal estimates so there is no problem if it is a bumper crop and arrivals are greater than expected.

According to the quota allocated to the various state procurement agencies, Pungrain will buy 25.5% (34.4 lakh tons), Markfed 24% (32.4 lakh tons), Punsup 23.5% (31.7 lakh tons). tons), State Ware Housing Corporation 14.4% (19.5 lakh tons) and FCI 12.6% (17 lakh tons).

All state agencies have been tasked with arranging for jute bales and storage. A total of 4.37 lakh bales of jute are needed for supply, with a capacity of 50 kilograms each. Of the total arrival, the state will retain 8.7 lakh tons for decentralized procurement to distribute the wheat under the public distribution system and other programs run by the Center.

40L ton of wheat in state godowns

Currently, there are 40 lakh tons of wheat stocks in godowns in the state. Every month, at least 12-13 lakh tons of stocks are utilized under the Pradhan Mantri Garib Kalyan Yojana, under which allocations to 80 crore beneficiaries have been doubled to 10 kilograms of food grains due to the coronavirus pandemic in Classes.

By the time new purchases begin in the coming season, stocks are expected to drop to 25 lakh tons, which is the lowest opening stock balance in the state when sourcing rabi during of the last five years. There are 94 lakh tons of rice in godowns in the state and 100 lakh tons of paddy waiting to be crushed, to make another 66 lakh tons of rice.

In June last year, Punjab faced a critical situation as the state then had record stocks – 290 lakh tons (180 lakh tons of wheat and 110 lakh tons of rice) from the three seasons of 2019 to 2021 and 42 lakh tons of paddy stored with millers waiting to be shelled. The stocks the state was storing at that time was one-third of the stocks (850 lakh tons) stored in the country.


    Gurpreet Singh Nibber is a special correspondent in the Punjab office. It covers agriculture, the energy sector, Sikh religious affairs and the Punjabi diaspora.
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