In a bid to contain high prices by stabilising prices of essential food commodities like wheat and rice, the government is considering series of proposals to sell commodities procured by Food Corporation of India in the open market.
Under the proposal, which is likely to be taken up by the Union Cabinet at its meeting scheduled on Thursday, the surplus wheat held with FCI may be directly sold to flour millers through an auction process.
The others steps being considered are directing state governments to sell wheat and rice directly to consumers, allowing distribution of wheat to above poverty line families through Public Distribution System (PDS) and also direct sale by FCI.
Earlier, Union agriculture minister Sharad Pawar had said that government has enough wheat stocks to sell up to 6 million tonnes of the food grain in the open market.
With the procurement of rice for the kharif season to begin by October, the government wants to sell off excess rice the FCI and state agencies hold in their godowns. FCI and the other state-owned procuring agencies are estimated to have a stock of 26 million tonnes of rice.
Pawar said the government has kept 5.5 million tonnes of wheat as buffer stocks against the buffer norm of 4.5 million tonnes, plus it has also allocated 3.0 million tonnes as strategic reserve and another 3.0 million tonnes just for open market sale.
India’s wheat procurement in the marketing year that started April 1 had reached an all-time high of close to 23 million tonnes, much higher than the usual requirement of 15 million tonnes. The additional 8 million tonnes will shared between maintaining a strategic reserve and open market sale programme.
The country’s wheat production in 2008-09 is also tipped to reach an all-time high of around 78.40 million tonnes, up from 75.81 million tonnes last year.