Government adds Rs25-50 bonus to wheat MSP to beat private competition

06 March 2007

Mumbai: The government is considering a bonus over and above the minimum support price of Rs750 per quintal fixed for wheat amidst, what it feared, an aggressive buying by private trade from farmers.

The bonus, expected to be in the region of Rs25 to Rs50 per quintal, could push up the support price to Rs800 a quintal. The announcement comes after a meeting of the chairman of the Commission on Agricultural Costs and Prices (CACP) T Haque had with agriculture minister Sharad Pawar.

"We are looking at all options including a marginal bonus on wheat MSP,'''' reports quoting official sources said.

The Food Corporation of India (FCI) is will start procurement of foodgrains on March 15. FCI officials are targeting 150 lakh tonnes of wheat procurement this year.

Last year, the government could procure only 91 lakh tones of wheat for PDS sales against the target of 162 lakh tonnes.

Lower procurement last year had forced the government to import about 55 lakh tonnes of the commodity, the first time in six years that the country had to buy the grain from overseas.