Ban on private sale of wheat to rob farmers of Rs.150 bn

March 31st, 2008 - 2:12 pm ICT by admin  

By Jaideep Sarin
Chandigarh, March 31 (IANS) As wheat procurement season starts in north India, the farming community in Punjab and Haryana - which account for over 50 percent of the nation’s food grain pool - is up in arms against a central government decision to ban the sale of wheat to private players. The central government recently issued an order that private purchase of wheat will not be allowed in both states. The order came days ahead of the harvesting season.

Farmers’ leaders say the order will cause a loss to farmers of Rs.90 billion in Punjab and Rs.60 billion in Haryana - a combined loss of nearly Rs.150 billion ($3.7 billion).

The order came following apprehension by government procurement agencies that farmers would opt for private sale of wheat at higher prices instead of the government’s minimum support price (MSP) being offered at Rs.1,000 per quintal.

Last year, the procurement of government agencies had fallen short of the target for the country’s buffer stock, forcing the government to import wheat from other countries at much higher international market rates.

Farmers are getting market value for wheat at Rs.1,600 per quintal from private purchasers. Some farmers have already contracted futures trading with private players who have even offered to pick up the harvested stocks from the fields instead of from the grain markets.

“I have already sold my wheat to a private buyer. There is no going back on my decision. The government has no right to stop me from selling my produce to anyone,” said Janmeja Singh of Gill village near Ludhiana said.

Private buyers are mostly from the food industry - bread and biscuits makers and their agents. With the food industry growing in recent years, the demand for food grain has also increased.

The official purchase of wheat by government agencies commences April 15 this year. Farmers in Punjab and Haryana are expected to produce 15 million tonnes and 10 million tonnes of wheat this year.

Former MP and Bharatiya Kisan Union (BKU) leader Bhupinder Singh Mann is furious with the government for imposing a ban on the sale of wheat to private buyers.

“This ban denies farmers their fundamental right to sell wheat to any one they like or for a better price. This is creating a monopoly for government agencies, which is both illegal and immoral,” he said.

“This order is atrocious because it ransacks the fundamental right against exploitation. Clearly scandalous in letter and spirit, this order is primarily aimed to rob farmers and force them to earn less,” Mann told IANS.

Farmers say that they are being forced to pay a huge price every year to keep the country’s food grain demand in order.

“Why should people who get good salaries not pay for the extra price that farmers are getting from the open market?” asked agriculturist Harjit Singh of Samrala.

Scores of farmers will assemble here Wednesday to protest the government order. The BKU has already written to several chief ministers, MPs from both states and legislators to pursue the matter with the government and save farmers.

Procurement officials say that the government is also justified in disallowing sale of wheat to private players so that government stocks do not fall short of targets.

“We have to think of the country’s buffer stocks,” one officer pointed out.

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