The government is ready to concede the wheat growers demand for an increase in wheat procurement prices. Krishi Bhawan sources say the new prices will be announced in a couple of days.
The move to revise prices follows the threat by farmers, mainly in northern India, to stop selling wheat to the state-owned procurement agencies if the support price of Rs 415 a quintal is not raised.
Farmers in states like Punjab are incensed over the fact that the government is paying over Rs 500 for wheat imported from Australia and Canada.
Feeling badly short-changed, the farmers are demanding that they be paid prices that are par with those of imported wheat. The farm lobby has the support of the governments of wheat-growing states, notably Punjab and Haryana.
The extent of the increase, which may be in the form of bonus, has yet to be decided. The Kisan Coordination Committee (KCC), a national platform for different farmer societies which has been spearheading the campaign, has demanded an increase of Rs 200 a quintal over the current price of Rs 415. However, an increase of even half the amount, would bring the domestic prices close to the average price at which about 1.65 million tonnes of wheat has been contracted for import from Australia, Canada and Argentina.
The Centres move to advance the launch of wheat procurement operations this year has already misfired. Food Corporation of India (FCI) and state grain procurement agencies formally launched their procurement drive on Monday, but could not pick up a single grain of wheat. Some Bombay grain traders, on the other hand, are reported to have purchased wheat from Punjab farmers in out-of-mandi transactions at prices that were higher than the procurement price.
The initial experience of the procurement agencies in grain markets in Punjab and Haryana seems to have caused panic in the the food ministry, leading to a flurry of activity.
The agriculture ministry, which ultimately has to announce the price hike, has also initiated exercises to decide the increase. The food ministry seems willing to concede an increase of up to Rs 100 a quintal. Indications are that the final figure would be between Rs 25 and Rs 100.
Enquiries with Krishi Bhawan reveal that the government is keen to replenish the dwindling wheat reserves in the central grain pool.
By April 1, actual wheat stocks with all state agencies is projected to fall to 2.72 million tonnes, nearly one million tonnes below the minimum level prescribed under the food security norms that guide buffer stocking operations.
Although wheat harvesting has already begun in Uttar Pradesh and parts of Rajasthan, market arrivals have yet to pick up. The crop in Haryana and Punjab is about to ripen and the harvesting is likely to start in the next few days.
However, the carryover of the last years crop is expected to be offered by the farmers for sale now.
Most of it, however, is likely to be bought by private traders as the wholesale prices of wheat are now ruling at around Rs 680 to Rs 700 a quintal even in the heart of the wheat belt.
