Bonus withdrawal may spell trouble for wheat farmers

Wheat farmers in Punjab may find it difficult to get a good price for the foodgrain as the Union government is firm on doing away with the bonus of Rs 100 a quintal after the procurement season ends in May.

According to official sources, farmers, who have hoarded their stocks in anticipation of a better price, would be in trouble once wheat procurement ends by the month-end. With the withdrawal of the bonus, wheat prices would decline to Rs 750 a quintal (as against Rs 850), which is the government declared minimum support price (MSP), the sources added.

"If the bonus is withdrawn, private traders would not be interested in buying at the Rs 850-level and it will not be beneficial for farmers who have withheld their stock," a senior official from the Ministry of Consumer Affairs, Food and Public Distribution said.

The government would not face any difficulty in maintaining its buffer stock as it has a reserve of over 4 million tonnes since April 2007 against last year's 2 million tonnes, the official said. Besides, the decision to import wheat would also be helpful in meeting the requirements of welfare schemes, the official added.

Meanwhile, the Supreme Court today declined to stay the wheat import tender of 1 million tonnes floated by the State Trading Corporation.

"India would not face difficulties in importing wheat this year as global production is expected to surge to 623 million tonnes from 587 million tonnes last year," sources added. Government officials maintained that wheat import would be around 5 million tonnes this year as procurement may not touch the target of 151 lakh tonnes. This year's wheat procurement has surged past last year's total of 92.3 lakh tonnes as the Food Corporation of India purchased 96.7 lakh tonnes from all over the country as on April 16 against arrival of 132.43 lakh tonnes at different wholesale markets.

However, the procurement in Punjab and Haryana is 12.1 lakh tonnes and 15 lakh tonnes short of the targeted levels of 75 lakh tonnes and 45 lakh tonnes respectively. Out of 75.55 lakh tonnes of wheat in Punjab, FCI was able to lift 62.9 lakh tonnes as on yesterday. In Haryana, procurement stood at 30.09 lakh tonnes against the arrival of 33.5 lakh tonnes.

The wheat procurement is progressing well in Rajasthan but is a cause of concern in Uttar Pradesh, the largest wheat growing state in the country, an FCI official said. In Rajasthan, procurement has gone up to 2.36 lakh tonnes as on May 16 against a target of 3 lakh tonnes for this season.

However, despite roping in agencies like NAFED, FCI has procured only 1.14 lakh tonnes from 6.68 lakh tonnes that arrived in UP. FCI aims to purchase 15 lakh tonnes this year from the state.