New Delhi: The government on Wednesday said it has reduced prices of wheat earmarked for sale to retail consumers by nearly Rs200 a quintal to rein in runaway food inflation.

“The wheat price (under Open Market Sale Scheme) has been reduced by nearly Rs200 a quintal from the price fixed earlier," food and agriculture minister Sharad Pawar said. Asked if the price cut applies to both states as well as bulk consumers, Pawar said it has been done only for retail consumers.

Earlier, the Union government had decided to sell wheat to the states at the minimum support price of Rs1,100 per quintal, plus transport cost.

Under the scheme, the government had allocated to the states 1 million tonnes of wheat each during October-December and January-March for distribution to retail consumers.

Tackling inflation: Agriculture minister Sharad Pawar. Subhav Shukla / PTI

The scheme, however, did not receive good response and the offtake by the state governments had been very less. There has been demand from states for supply of wheat at the Below Poverty Line rate (Rs4.15 a kg).

Beside states, the government had earmarked 1 million tonnes for bulk consumers for the October-March period. Even bulk consumers, such as flour millers, are demanding lower rates.

Food inflation had touched a high of 19.95% as of December first week.

Asked about the centre-state spat over controlling the price rise, Pawar said, “It is the duty of the states to supply the commodities to the public. I can’t do it at the Centre."

“We just want their cooperation in running the public distribution system effectively," he added.

Pawar said the government is taking the financial burden as annual food subsidy has increased from Rs19,000 crore in 2004-05 to Rs60,000 crore this year. He also said that states have not yet sent their opinions to the government on the proposed food security law even though a draft of the Bill has been circulated to them.

The government has announced that it would enact a law to ensure food security of the poor by giving them 25 kg of wheat and rice at Rs3 a kg per month as a matter of right.

Meanwhile, state-owned oil firms have agreed to pay Rs27 a litre, or 25% higher from existing level, for buying ethanol from sugar mills for doping petrol. Pawar said an agreement has been reached between the oil marketing firms and millers on the price of ethanol but did not give details.