Bumper crop hammers MP wheat prices

Wheat growers in Madhya Pradesh are facing problem of plenty this year. The third largest producer of wheat, MP was likely to post record production of 62-65 lakh metric tones.

As a result the prices have been crashed to as low as Rs 600 per quintal against the minimum support price of Rs 630 per quintal in all the main wheat growing districts including Sehore, Raisen and Hosangabad.

Farmers under the agri-income insurance scheme were suffering most as prices have declined the most in the last few days from Rs 800 to Rs 600 per quintal.

Traders and hoarders had pushed down the purchase prices of 'Lokwan' variety wheat to Rs 550 per quintal against Rs 850 per quintal last year.

Speaking to Business Standard, director of agriculture G S Kaushal said the bumper crop was to blame. MP was famed for its 'sharbati' wheat, which is exported to west Asia and Europe.

In Raisen, Tikamgarh and Hoshangabad districts, the state government had earlier banned purchase of wheat at minimum support price after the 'insurance scheme' was rolled out. This was being reversed.

Under the scheme, a farmer offered a price lower than the support price was assured compensation by the insurance company for losses, but farmers under insurance did not have the option of selling the crop at minimum support price. Of the 4 lakh odd wheat growers in these three districts, almost 30 per cent were under the insurance scheme.

The state government has now decided to start wheat procurement at minimum support price in these districts with effect from April 2. Food Corporation of India and Madhya Pradesh State Civil Supplies Corporation have been named the the nodal agencies for wheat procurement at minimum support price.

"The state government has set up 826 wheat procurement centres and more will be opened soon," said a spokesperson. The state government has amended the Mandi Act so that farmers could also opt for contract farming.

Rallis India, ITC, Hind Lever and other companies were keen on contract farming in MP, but most farmers still relied on mandis.