Wheat exports to Iran: Punjab, Haryana's loss could be MPs gain

A team of officials from food ministry is currently in Iran to negotiate a deal to supply 2-3 mn tonnes of wheat annually from India

In what is Punjab and Haryana’s loss could be Madhya Pradesh gain as the government is working on a proposal to export wheat to Iran from states such as Madhya Pradesh where the dreaded ‘karnal bunt’ rust is not present. A team of senior officials from the union food ministry is currently in Iran to negotiate a deal to supply 2-3 million tonnes of wheat annually from India.

The negotiations ran into some problem after Iran expressed concern over presence of ‘karnal bunt’ rust in Indian wheat. Karnal bunt is a fungal disease that deteriorates the quality of wheat.  Tuesday, agriculture minister Sharad Pawar accepted the same and said that the government will try and export wheat from areas where ‘Karnal Bunt’ rust is not present and Madhya Pradesh along with neighbouring Rajasthan are few such areas.

Traders said if the deal materialises in favour of Madhya Pradesh wheat, then it could be a big setback for farmers of Punjab and Haryana, two of India’s biggest wheat producing states as it would rob them of an assured and regular market. Madhya Pradesh has emerged as one of India's leading producer of wheat and harvested a record around 9 million tonnes of the crop in 2011-2012.

 “There has been some complaints of presence of ‘Karnal Bunt’ rust in wheat produced in some areas of Punjab and Haryana and it has been a problem,” agriculture minister Sharad Pawar told reporters.

The wheat will sold off to Iran to make payments for crude oil imported from that country. India is Iran’s second biggest market for crude oil after China. In 2010, India abolished a decades-old mechanism of making payment for Iranian crude oil following pressure from the United States. At present, part of payment for oil is made in rupees and part in euros.

India produced a record over 92 million tonnes of wheat in 2011-2012 crop marketing. The bumper harvest along with record production of rice has filled the state-run granaries.

Last year, the government had lifted the three-year long ban on wheat exports and has been selling both in the domestic market and also abroad from its own granaries to clear the space for storing the new harvest.