India to review wheat purchase price in October

India to review wheat purchase price in October

New Delhi: The Indian government will review the price at which it plans to buy wheat from domestic farmers when the new sowing season starts in October, the farm secretary said on Wednesday.

In an effort to boost output, the government increased wheat prices in recent years. It paid farmers Rs1,080 ($22.50) per 100 kg for the 2009 harvest, up from Rs1,000 in 2007-08 and Rs650 per 100 kg in 2005-06.

Farm secretary T. Nanda Kumar told reporters the Commission for Agricultural Cost and Prices had made a recommendation and it would be reviewed next month.

Another increase in the fixed price would encourage farmers to plant more wheat, which could help cover a shortfall in summer crops this year due to deficient monsoon rains.

Up to mid-September, monsoon rains are about 20% below normal following a poor start to the season.

Farmers in India, the world’s second-biggest producer of the grain, grow only one wheat crop in a year, with sowing from October and harvests from March.

Kumar said early sowing and expected better soil moisture due to some late monsoon rains would improve productivity. He said wheat sowing was expected to start early in the eastern state of Bihar and northern state of Uttar Pradesh, a leading producer.

“Wheat productivity may be increased by 20% due to early sowing. Improvement in late monsoon rains has led improved soil moisture and an increase in water reservoirs level," Kumar said.

India produced a record 80.58 million tonnes of wheat in 2008-09. Last week, the government said wheat output in the next season might fall 2%.