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Centre may buy 15.15 million tonnes wheat from farmers

Centre may buy 15.15 million tonnes wheat from farmers
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First Published: Sat, Mar 03 2007. 02 40 AM IST
Updated: Sat, Mar 03 2007. 02 40 AM IST
New Delhi: The Centre may buy 64% more wheat from farmers to boost reserves and slow the fastest inflation in two years.
The government may buy 15.15 million tonnes from this year’s crop, harvesting for which starts this month, compared with 9.23 million tonnes last year, minister of state for food Akhilesh Prasad Singh said on 2 March.
The ruling Congress party-led coalition faces an opposition that’s attacking Prime Minister Manmohan Singh’s government for spiraling prices of farm products. Wheat prices on the National Commodity & Derivatives Exchange in Mumbai have risen by a fifth in the past 10 months, prompting the government to halt exports and ban futures trading in the commodity.
The Congress lost two state elections this week as inflation eroded the spending power of people. The government wants to stem an increase in prices of food staples ahead of polls next month in Uttar Pradesh.
The government has in the past month reduced import duties on cooking oils, steel, aluminum, copper, cement and chemicals such as sulphur, and cut fuel prices. Last week, the government said it would sell 365,000 tonnes of wheat at below market prices to cushion consumers from rising food prices.
The government will purchase 7.5 million tonnes of wheat from Punjab, 4.5 million tonnes from Haryana, and 1.5 million tonnes from Uttar Pradesh. The rest will come from Madhya Pradesh, Bihar and Rajasthan, Singh said.
Meanwhile, the Centre has not approved duty-free wheat imports by private trade after 28 February, but may allow it if a need arose, a top food ministry official said on Friday.
The government had allowed private trade to import at 5% duty in June 2006, but later abolished the levy to make up for an acute shortfall
“No extension has been issued for private duty-free wheat imports as of now,” food secretary T. Nanda Kumar told reporters.
He said the government might allow private players, who have bought close to one million tonnes, to import duty-free wheat again “as and when there is a need”.
The government was forced to order an expensive import of 5.5 million tonnes to shore up its buffer stocks as production fell.
Kumar said the government was confident of procuring adequate wheat stocks when harvest begins later in March. In 2006, the government could procure only about9.2 million tonnes against a target of 16 million tonnes.
The government buys foodgrains from farmers at a fixed price to build its buffer and to meet exigencies.
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First Published: Sat, Mar 03 2007. 02 40 AM IST
More Topics: Money Matters | Commodities |