UP govt may face wheat crisis despite ample produce

Farmers get better price for their produce in open markets

The Uttar Pradesh government's failure to gauge the market's pulse on time has resulted in a wheat crisis, which is beginning to develop in the state.

While, on the one hand, wheat is becoming the fastest-selling commodity in the open market, the government agencies of Uttar Pradesh are facing wheat shortages.

The reason is a huge price difference between the wheat prices in the open market and the minimum support price (MSP) offered by the state government. This difference had resulted in the state government being forced to buy wheat from outside the state, even though the wheat production this year met the set target.

According to the Regional Food Commissioner, Agra, Amitabh, while the MSP offered by the state government for the open market was Rs 650 per quintal, wheat was selling at rates as high as Rs. 800 in the Shamshabad area, Rs 760 in Aligarh, Rs 815 in Achchnera, Rs 802 in Mainpuri, Rs 750 in Etah and Rs 770 in Firozabad. This indicates that the prices of wheat in the open market were atleast Rs 100 per quintal above the MSP while on the higher end, it could be more than Rs 160 over the MSP. This factor alone was deterring farmers from selling their produce to government agencies and they had been stocking up their produce, hoping for a further rise in open market prices.

According to the commissioner, so far, only about 206 metric tonnes of wheat had been sold by the farmers of the Agra division to the government agencies out of which, the collection in Agra was 37 tonnes, Aligarh collected 34.8 tonnes, Etah 16.7 tonnes, Firozabad 8.6 tonnes, Hathras 9.7 tonnes, Mainpuri 14 tonnes and Mathura topped at 74.9 tonnes. But there were very little hopes of the rate of these collections picking up soon.

He said that in most of the areas of the Agra division, wheat had been harvested and stored by the farmers but they were still waiting for the rates to climb further, for which, he blamed the multinational companies that had reportedly played bullish in the food grain market.

He said that to encourage farmers to sell their produce to government agencies, the UP Chief Minister Mulayam Singh Yadav had even offered a bonus of Rs 50 per quintal to the farmers if they sold their entire produce to the government.

On the other hand, the state government has also begun cracking down on the illegal export of foodgrains outside the state. Acting on the directions of the UP Chief Secretary, the UP trade tax officials in Agra raided a goods train loaded with 36 containers filled with 720 metric tonnes of wheat and confiscated the entire consignment that was being exported without proper papers to Bangalore.

According to trade tax department sources, the wheat was being exported to some fake firms in Bangalore and no trade tax had been paid on this consignment, indicating a clear case of tax-evasion.