Wheat prices crash in MP

Farmers in Madhya Pradesh, the third largest producer of wheat in the country, are facing a problem of plenty.

The state is likely to produce 62-65 lakh metric tonnes of wheat this year. This has caused a sharp decline in wheat prices in the past few days, from Rs 800 a quintal to Rs 600 a quintal.

Farmers in the districts, where the Agri Income Insurance Scheme has been introduced, have been the worst hit. The scheme is applicable in the Raisen, Tikamgarh and Hosha-ngabad districts.

Under the scheme, if a farmer gets a price lower than the minimum support price (MSP) of Rs 630 a quintal, the insurance company will compensate the losses.

But this prevents farmers from selling their crop at the MSP. Of the 400,000 wheat growers in these districts, around 12,000 are covered under the scheme.

The state government has also sought the Election Commission's permission to procure wheat.

The Food Corporation of India and the MP State Civil Supplies Corporation have been asked to purchase wheat at the minimum support price. "The state government has set up 826 wheat procurement centres," said an official.

The government has already amended the Mandi Act to allow farmers to opt for contract farming.

Though Rallies India, ITC and Hindustan Lever Ltd have launched contract farming in the state, farmers are still dependent upon local mandis to sell their produce.