Wheat price should be Rs 950 a quintal, say Punjab farmers

Punjab farmers are confused at the announcement of Prime Minister Manmohan Singh, hiking the minimum support price (MSP) of wheat to Rs 700 a quintal from Rs 650. In fact, most of them do not know whether this Rs 50 is a bonus or a hike in the MSP. Bonus is for one season while the MSP is a permanent feature.

Farmers are worried also because this hike is for only those who have sold their produce to government agencies and not private traders.

In Punjab, the six government agencies assigned the task of procuring yield of wheat include the Food Corporation of India (FCI), PUNSUP, Markfed, the food and supplies department, the Punjab Warehousing Corporation, and Punjab Agro.

The price is expected to come into force with retrospective effect from April 1, when the Union agriculture ministry announced the procurement of wheat. Wheat will now be procured at Rs 700 per quintal. Earlier, wheat was being sold in the state at Rs 5-15 more than the existing MSP of Rs 650.

Speaking to Business Standard, Balbir Singh Rajewal, president of the Bhartiya Kisan Union (Rajewal), said the agriculture departments of Punjab and Haryana, and economists at Punjab Agricultural University, Ludhiana, and Haryana Agricultural University have calculated that the cost of production of wheat is Rs 800.

"So the MSP to be fixed by the Commission for Agricultural Costs and Prices should have been more than Rs 800. But, in Punjab, the MSP on wheat was fixed at Rs 650, which is not in the interests of farmers. Earlier, the Punjab government recommended Rs 700 as the MSP, the Haryana government wants it to be Rs 770, while at the last kisan mela in Ludhiana, Punjab Agricultural University wanted the MSP to be Rs 860. And secondly none of us know that whether this Rs 50 hike is a bonus or a hike in the MSP. If it's just a bonus, next year Rs 650 will be taken as the base price of last year and if it's a hike, Rs 700 will be taken the base price. Only 8-10 per cent of the wheat produced has been procured by government agencies. Now where will the farmers who have sold their produce to private traders go? We want all farmers to be treated at par; otherwise farmers will be hugely indebted because the number of farmers who sold their produce to private traders is far more than those who sold to the government agencies."

"Rs 700 is not a scientific rate. In 1966-67, the price of wheat was first fixed by the government, at Rs 72 per quintal. And now, the government itself is saying that there has been a 15-time increase in the cost of inputs used for the production of wheat. So if we take 1966-67 as the base year, till now the MSP of wheat has been increased by less than 8 per cent. If we take the current price index into consideration, Rs 1,140 per quintal should be the MSP now. We want the government to set it at least at Rs 950 per quintal, to prevent suicides," Rajewal added.

Harbans Singh Rosha, chairman of the market committee, Khanna, the biggest grain market of Asia, said around 6.3 million tonnes of wheat had been procured in the grain markets in the state.

"After the recent announcement, it is being sold at Rs 750-755 now. The government should give relief to farmers who have sold their produce to private traders."

This is last wheat season before the state goes to the polls early next year. The central government has set a target of 8.5 million tonnes of wheat from Punjab. In 2002, the government announced a bonus of Rs 30 on the MSP of paddy, but till now, the government has paid only Rs 10."