Centre to reimburse 6 states amount of value-cut for wheat

After easing the quality norms for wheat procurement in six states including Punjab and Haryana, the Centre today decided to reimburse to them the amount of value-cut it imposed on the purchase of wheat affected by unseasonal rains.
The move is aimed at ensuring that wheat farmers get the full minimum support price (MSP) of Rs 1,450 per quintal.
With wheat crop being affected badly due to unseasonal rains, the Food Ministry had relaxed the quality norms for wheat procurement in many states but imposed a nominal amount of value cut from the MSP to be payable to farmers.
However, the states decided not to pass on the burden to the farmers and bear it themselves.

"In order to give relief to the farmers affected by the unprecedented rains and hailstorms, the Cabinet has taken a decision today that the central government will reimburse the amount of value cut imposed on the wheat being procured by the FCI and State Government Agencies in Gujarat, Haryana, Madhya Pradesh, Punjab, Rajasthan and Uttar Pradesh under relaxed quality norms," an official release said.
The government said that the quality of wheat has been badly affected due to untimely rains and hailstorms in March- April this year.

"To facilitate purchase of affected wheat from the farmers at the Minimum Support Price, the Food Ministry has given relaxation in quality norms of wheat with respect to luster loss and increase in quantum of shrivelled and broken grains in various States.

"While doing so, the food ministry has imposed a nominal value cut on wheat procured under relaxed specifications, so that, separate marking and stocking of such stock and its utilisation on priority could be ensured," it said, adding that most of the States have decided to bear the amount of this value cut themselves and not to pass on to the farmers.
The Centre would reimburse this amount to the state governments through the Food Corporation of India, the nodal agency for procurement and distribution of foodgrains.
"Taking the request of the State Governments into account, the Union Cabinet has taken a decision today to provide this financial support to the State Governments, so that, they can freely help the farmers by procuring their wheat under relaxed specifications," the statement said.

As per latest data, a total quantity of 158.61 lakh tonnes of wheat has been procured so far in 2015-16 rabi marketing year (April-March) as against the procurement level of 169.29 lakh tonnes in the year-ago period.
The Centre has fixed the wheat procurement target at 30.05 million tonnes in 2015-16 marketing year (April- March) as against 28 million tonnes bought by the FCI last year.
Wheat production is likely to fall by 4-5 per cent from the initial estimates of 95.76 million tonnes in 2014-15 crop year (July-June) due to unseasonal rains.