Govt to import 3 mt wheat

Bonus offered on sale to FCI.

The government today decided to import three million tonnes of wheat in addition to 0.5 million tonnes already contracted to replenish the depleted wheat stocks in the central grain pool.

It also decided to pay a bonus of Rs 50 a quintal on top of the minimum support price of Rs 650 a quintal to wheat growers who sold their produce to the Food Corporation of India (FCI) or state grain procurement agencies.

This bonus would be applicable with retrospective effect from March 20 when the wheat procurement operations commenced. This will cost the exchequer Rs 731 crore.

Wheat imports will be carried out by official agencies like the State Trading Corporation (STC) at zero duty.

These decisions were announced here today by Food and Agriculture Minister Sharad Pawar after a meeting with Prime Minister Manmohan Singh. He had earlier spoken to chief ministers of the three major wheat producing states of Punjab, Haryana and Uttar Pradesh to review the wheat scenario.

Pawar said the latest review of wheat procurement trends in these states indicated that total procurement this year might be only 15 million tonnes, against the earlier expectation of 16.3 million tonnes. The wheat inventory in the official grain stocks had dropped to 1.9 million tonnes on April 1, against the buffer stocking norm of 4 million tonnes for that date.

With a total import of 3.5 million tonnes and local procurement, which would get a boost due to the bonus, the stock position would remain comfortable even to meet any eventuality in the coming year, he said. About 7.2 million tonnes of wheat had already been bought for the central pool in the on-going rabi marketing season.

He indicated that the total wheat production this year might touch 74 million tonnes, against the earlier expectation of around 73 million tonnes. "Though I am personally unhappy about importing wheat, food security is the prime objective of the government in taking this decision," Pawar said.

The minister defended the import decision on the plea that the effective economic cost of the domestically procured wheat (after taking into account levies and other costs) came to Rs 10,308 a quintal, against the cost of Rs 9,978 a quintal for imported wheat.

He said wheat procurement had remained relatively low so far because the private trade was lifting the stocks by paying a marginally higher price than the support price of Rs 650. Wheat crop in Uttar Pradesh was expected to mature late this year and the new produce was likely to hit the mandis only from next week.

The government had sold a total of 1.1 million tonnes of wheat in the open market from its stocks in last one year.

These sales, undertaken by the FCI to hold the price line, had been stopped completely since April 1, the minister said.