Terming the hike in procurement prices as too little, several farmers in the major wheat-producing states Punjab, Haryana and Uttar Pradesh said it would have limited impact on supplies.
The government said on Friday it would offer Rs100 more per quintal of wheat, pushing the procurement price to Rs850, the highest in 12 years.
Mint reported the government’s intention of raising the procurement price of wheat on 12 February.
“The government is never proactive,” says Jaideep Brar, a farmer in Rampur, UP. “It keeps responding to a crisis situation.” Brar says the minimum support price should have been raised to at least Rs900 in October-November to motivate more farmers to grow wheat.
Agrees Suresh Martin Chauhan from Santokh Majra, Haryana: “The bonus is a temporary relief to the farmer. It will spur more haggling for the market share of wheat among the buyers,” he said. Chauhan adds that the government’s simultaneous decision to allow duty-free import of wheat till 31 December will help to artificially control wheat prices. “To import, it will cost them (government) Rs1,400 per quintal by the time it reaches the market, but are offering us Rs850.”
In Punjab, the No. 1 state in terms of wheat procurement, farmers feel the increase is insufficient to meet their input costs. In Punjab, many large farmers store wheat till September when it fetches higher prices. They may do that again this year. In UP—the largest wheat-producing state, but third in terms of state procurement—the government’s announcement may sharply impact prices of private traders.Says Ajaipal Gill, a farmer in Punjab’s Faridkot district, “with a profit of Rs2,000 per acre and a land ceiling of 17 acres, the large farmer earns Rs68,000 a year. What about the small farmer?”
“There are virtually no government purchases here,” says Jaskaran Singh, a farmer in Muzaffarnagar district. “Normally, the arhtiya (middleman) picks it up from the farm itself. Last year, I got around Rs800 per quintal, Rs100 more than the government price.”
Wheat procurement this year will take place during the critical assembly polls in UP.