March 16, 2009

Punjab, called India's bread basket for being the country's biggest foodgrains producer, is facing the risk of spoiling a crop slated to be harvested soon because its state-run granaries are overflowing with last year's record output, and the federal government's ban on exports isn't helping.

Farmers are queuing up in front of offices of the federal procurement agency, Food Corp. of India, to complain about the inadequate storage. The winter-sown wheat crop is expected to ready starting this month-end, and with carryover stocks of 4 million tonnes in Punjab alone, space is giving government officials nightmares.

"We are bursting at the seams," said a senior federal government official, based in Punjab.

"We are juggling for space between rice and wheat," a Punjab state-government official said. Both declined to be identified.

The Asian nation stopped exports to ensure ample local supplies because of a drop in output in 2005 and 2006 to lows unseen in recent years, forcing imports of wheat at a time when global commodity prices were high. India's inflation surged last year, partly on account of spiralling foodgrain prices, giving political parties in the opposition a chance to call the government anti-poor.

"The storage problem is so acute that the wheat may have to be stored in open fields this time," Vinod Kapoor, former president of Roller Flour Millers Federation of India said.