Farmers prefer private traders to FCI

02 April 2007

New Delhi: Farmers of Punjab and Haryana will start bringing their wheat crop to the market this week and a number of private companies and agents spread out in villages offering significantly higher prices for their produce than the government''s procurement agencies.

The government has raised the support price for this year to Rs850 a quintal, which includes a Rs-100 bonus, from Rs650 last year. Private companies, on the other hand, are said to be offering more for the wheat to almost as much as Rs1,050 a quintal to farmers in Patiala district of Punjab.

Hence corporate buying may again dent, after last year, the purchase of wheat by the Food Corporation of India (FCI), which feeds the public distribution system for economically weaker sections of society and intervenes in the open market to stabilise prices.

In 2006-07, the FCI was able to procure only 9.2 million tonnes of wheat, against 14.8 million tonnes in 2005-06.

The corporation is targeting a procurement of 15 million tonnes this year (the crop output is expected to rise to 72.5 million tonnes from 69.5 million tonnes last year), but experts feel it could be an uphill task now.

ITC and Cargill have drawn up plans to buy large quantities of wheat this season, though the Australian Wheat Board has decided to stay out of Punjab and Haryana.