Much like what happened last year, the FCI is unlikely to be able to procure the amount of wheat it needs to. This article is a sequel to the one published under a similar title a year ago (April 1, 2007). Unfortunately, the emerging scenario of a critical situation arising out of the stagnant production of wheat, unsatisfactory procurement due to hoarding by farmers in anticipation of better prices, and a rising trend in price, portrayed in the write-up, turned out to be true. A similar situation appears to be developing in the coming year. April 1 officially marks the commencement of the marketing season. The Food Corporation of India (FCI) is reported to be planning a purchase of 15 million tonnes (mt) for the buffer stock. Its target was 15 mt last year too, but the achievement fell short by 4 mt. It claims that it would have 5.3 mt on April 1 against the norm of 4 mt. Considering that the releases from the buffer stocks for various purposes are of the order of 1 mt a month, the total availability of the grain with the FCI (including the norm at the beginning of April 2009), with a procurement of 11 mt, should be just adequate. However, an additional procurement of 4 mt ensures a sense of food security providing a cushion for open market sales when prices harden. The question is whether FCI can achieve its target given the current trends in output, local and global prices, and the general politico-economic situation. Economic decisions are made at the margin. A shortfall in supply, though marginal in magnitude, can have a large impact on prices. Despite scientific crop-cutting experiments and long experience, the forecasting of output is still not satisfactory. It is difficult to understand the estimates of international agencies and the USDA differing from that of the Indian government. One would have thought that the foreign agencies get their data from the government. Recent press reports provide conflicting outlooks but they all centre around an output of 75 mt, which is more or less the same as last year's. Incidentally, in the past, in order to arrive at the marketable surplus, there was a convention of deducting 12.5 per cent from the output estimate to account for seed, feed and wastage. This is no longer done. If this still holds good, the available output will be much less than 75 mt, straining the situation more. The marketed surplus would be further lower if farmers' own consumption and stock-keeping are reckoned with. The annual consumption is around 73 mt. Thus the demand-supply position is tight. There is stagnant supply against rising demand influenced by the growth in population, changing habits of people in rice-eating states taking to wheat and the poorer sections shifting to it from coarse grains, thanks to the rise in incomes. The price is reported to be ruling around Rs 1,120 a quintal in north India. The wholesale price index has recorded a rise of around 5 per cent since April. There is a general tightening of supplies in the world due to the setback to production, partly on account of the weather in many countries and partly due to the substantial switch-over to corn in the US from wheat thanks to the demand for bio-fuels. The finance minister pointed out recently that the international price of wheat had gone up by 88 per cent over the year. Food prices rose by 4 per cent in the US in 2007, the highest since 1990. As of December, 2007, 37 countries were reported to be facing food crises, and 20 had imposed some sort of price controls. Food riots have been reported in Burkina Faso, Cameroon and Egypt. Controls on exports of wheat have been imposed in Pakistan, Argentina, Ukraine and Russia. World stocks have hit the lowest level in relation to consumption in 25 years. Aggravating the situation further for decision-makers is the general inflationary situation prevailing in the country across sectors and the scheduling of elections in big states during the current year, followed by the one to Parliament next year, at the latest. The minimum support price (MSP), which also doubles up as the procurement price, is Rs 1,000 per quintal