Pvt buying of wheat negligible in Punjab, Haryana

Private purchase of wheat in Punjab and Haryana remained negligible with almost entire crop being procured by government-owned agencies in both agrarian states during the ongoing rabi marketing season.
Traders attributed the "insignificant" purchase by private companies and traders to high taxes, available of crop at cheaper rates in states like UP, Delhi, MP and "pitiable" condition of wheat flour industry in both states.
In the ongoing wheat procurement season, private traders have bought just 1,634 metric tonnes of wheat out of 66.65 lakh MT so far in Haryana, officials said.
In neighbouring Punjab, purchase of wheat by private traders was 1.71 lakh MT out of total purchase of 105.89 lakh MT so far, they said.

Rest of the crop in both states was bought by government-owned procurement agencies for central pool.
"Why private traders or companies will buy crop from Punjab or Haryana when they can buy at cheaper rates from other states like UP, MP and Rajasthan," Punjab Roller Flour Mills Association President Naresh Ghai said.

Unlike in Haryana and Punjab, wheat can be bought at lesser rate than the MSP in Uttar Pradesh and Rajasthan as the enforcement of MSP rates in these states was not "properly followed," he claimed.
Traders said tax and other levies on wheat in Haryana and Punjab are more than 12 per cent while in Delhi, there is no tax on food grain and in UP, tax rate is about 6 per cent.

As the government supplies wheat under Open Market Sale Scheme (OMSS) scheme, private buyers are reluctant to stock wheat and prefer to buy crop when the FCI releases in the market.
"Traders do not want to block investments in buying wheat during procurement season as they know FCI will release wheat after procurement under OMSS which is also one of the reasons of lesser crop buying by private traders," said Ghai.
Flour industry in Punjab is also upset over the government's decision of various tax exemptions and cheap power to new processing industry at the cost of existing industry.
"How can we survive when input cost of new units is lesser than us as they are claiming tax incentives and other benefits from the state government," Ghai said.

The flooding of wheat based products like Maida (refined wheat flour) at cheaper rates from other states like UP has also hit state's industry, forcing it to operate at 25 per cent capacity, he said.