Govt may sell wheat to flour mills in the open market

The government is working on a combination of various measures including selling wheat directly to flour millers through an auction process to operationalise its open market wheat sale programme.

The other steps being considered are directing state governments to sell wheat directly to consumers, allowing distribution of wheat to above poverty line families through PDS and also direct sale by Food Corporation of India, official sources said.

“The programme will be made operational through a combination of all or one step,” a senior government official said.

Selling wheat directly to millers will enable consumers to avail flour, instead of wheat, at cheap rates.

Agriculture minister Sharad Pawar said on Wednesday that the government has enough stock to sell up to 6.0 million tonne of wheat in the open market.

“We have noted that wheat prices have moved up in some quarters and will do anything to bring it down,” Pawar told reporters. Earlier, he had said that the government would sell wheat in the open market in the next six months to bring down prices.

Pawar further mentioned that the government has kept 5.5 million tonne of wheat as buffer stock against the usual practice of 4.5 million tonne. In addition, it has also allocated 3.0 million tonne as strategic reserve and another 3.0 million tonne for open market sale.

“The government could utilise the strategic reserve for open market sale,” he informed, noting that this will take the total amount of wheat to be sold in the open market to 6.0 million tonne.

Wheat procurement since the start of the marketing year on April 1 has reached around 23 million tonne, much higher than the usual requirement of 15 million tonne. The additional 8 million tonne will be divided between maintaining a strategic reserve and diverting the rest to the 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 tonne, up from 75.81 million tonne last year.

Good weather, rise in acreage, timely availability of seeds and other plant nutrients and an Rs150 per quintal increase in the minimum support price have been touted as the main reasons for the sharp jump in production. Meanwhile, most millers are awaiting the price at which government will sell its stock of wheat in the open market.