Dual pricing for procurement, new wheat import rules: Govt

New Delhi, June 18 (UNI) The Government wants to give farmers a price for wheat that not only covers the cultivation costs, but also corresponds to higher rates that may prevail in market.

The dual price system comes, likely to be introduced from next year, comes in the wake of a 38 per cent dip in wheat procurement by the Food Corporation of India (FCI) and State agencies as the private traders offered better rates to farmers this year.

Under the differential price system, the Government would be fixing the minimum support price (MSP) based on cost of cultivation and would also offer a variable rate-linked to open market price behaviour, according to official sources here.

''Only a uniform MSP would be fixed across the country, while the variable rate linked to open market price movements could differ from region to region during the season,'' they said.

During the 2006-07 Rabi marketing season (April-June), the Government paid a final price of Rs 700 a quintal for procurement of wheat to farmers which included a bonus of Rs 50 per quintal on the fixed MSP rate of Rs 650 per quintal for the whole season. The same price was applicable to all wheat-growing states.

The proposed new system would encourage the State Governments to lower various local taxes levied on the MSP to make the product cheaper for procurement, yet ensuring higher rates for the farmers.

In the current year, the wheat procurement had fallen to 9.225 million tonnes compared to 14.787 million tonnes in 2005-06 crop season.

The year 2005-06 was a testing year for procurement after the passage of Agriculture Producing Marketing Act (APMA) by most of the wheat producing states, allowing direct wheat sale to private traders. Earlier, only the licenced traders were allowed to buy wheat from the mandis.

The Government is also considering the possibility of undertaking commercial purchases from the open markets to meet the buffer stock norms and for supply under the Antodya Anna Yojana (AAY) and the public distribution system (PDS).

The total foodgrain consumption under the two programmes had gone up from 13.836 million tonnes during 2001-02 to 31.16 million tonnes in 2005-06.

The Union Cabinet has approved new wheat import rules conforming with international food standards for wider participation in an import tender.

''The new standards for wheat have been approved to bring it down to Codex level,'' Rural Development Minister Raghuvansh Prasad Singh told reporters after a cabinet meeting here on Friday.

The WTO has charged the Codex Alimentarius Commission with developing guidelines for global food standards.

Following a shortfall in production, the Government had contracted to buy wheat from overseas for the first time in six years, and the imports did not conform to the international standards. Hence, new wheat import rules conforming with global standards had to be approved.

In the current year, the harvest is estimated to be at 71.54 million tonnes, down from earlier projections of 73 million tonnes following rains and hailstorms that damaged the crop in some parts of the country in March.

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