NEW DELHI: The government India is considering importing three million tons of wheat to the over the difficult food situation created by dwindling grain reserves and low procurement.
Curtailing the scope of the public distribution system (PDS) and commercial purchases from the domestic market are among the other options under consideration to cope with the paucity of food-grains in the Central pool.
Such measures have become all the more necessary because of the government’s decision to step up grain allocation for the revamped PDS in selected blocks by a whopping 40%. This would require an additional two million tons of grains during the year. The decision to reduce the issue price of grains by 50 paise a kg in these blocks is likely to increase of take from these outlets.
Foreign wheat suppliers including the Australian Wheat Board and several official and private agencies in the US Canada and Argentina have already started putting out feelers to ascertain India’s precise import requirement. The exporters are said to be adopting a guarded posture in view of their recent experience when India retracted its move to import one million tons of wheat even after floating open global tenders. It had found the prices quoted in the bids too high.
India had also earlier tried in vain to persuade the US to supply subsidized wheat under the grain export enhancement scheme. A fresh attempt in this direction is not ruled out since the quantity of likely imports now is larger than before the US might reconsider its stand it is believed. The Indian ambassador in Washington Abid Hussain is currently in Delhi and is likely to be consulted on this issue.
With the rabi marketing season being virtually over except in UP it is clear that wheat procurement would not cross seven million tons against the requirement of nine to 10 million tons. Indeed it might even end up at around 6.5 million tons. Though the Center has extended the bonus price scheme up to June-end not much grain is expected to be bought by official agencies as the prices have already risen higher than the effective procurement price of Rs 275 to Rs 280 a quintal in wheat producing states.
Official circles now concede that the PDS cannot be maintained at the present level without augmenting the stocks through either imports or commercial purchases in the domestic market at the prevailing prices.
The farm lobby as also an influential section in the Union agriculture ministry is opposed to the import move on the plea that it would depress domestic prices to the detriment of local wheat growers
They maintain that such a step would ultimately prove counterproductive as it would prompt farmers to switch over to other crops.
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