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Open market sale price of wheat raised

Our Bureau

NEW DELHI, March 30

THE hike in the issue price of wheat supplied through the public distribution system (PDS) on Wednesday was followed up today with an enhancement in its price under the open market sales scheme (OMSS) to a `uniform' Rs. 900 per quintal. The rate would be effective from April 1, 2000.

The revision was warranted to offset the higher economic cost of procuring and distributing grains by the Food Corporation of India (FCI) on account of the hike in the minimum support price (MSP) of wheat to Rs. 580 per quintal.

The OMSS rate of Rs. 900 per quintal is now at par with the Central issue price of wheat for families above the poverty line (APL) as both have been pegged at the level of FCI's economic cost.

Hence, the anomaly of roller flour mills (RFM) being given wheat at a price above the below poverty line (BPL) rate but above the poverty line (APL) issue price has been removed.

The OMSS prices of wheat were last revised in December 1999 and the rates were Rs. 688 per quintal for the north zone, Rs. 705 per quintal for south zone, Rs. 699 per quintal for east zone and Rs. 697 per quintal for west zone. Zone-wise rates have now b een done away with.

The rates were, in fact, revised downwards in December last year to liquidate mounting wheat stocks of the FCI. This reduction, combined with the imposition of a 50 per cent import duty, led to a sudden surge in offtake.

While the FCI was able to off-load only 7,531 tonnes in June, 27,406 tonnes in July, 80,000 tonnes in August, 2.6 lakh tonnes in September, 3.74 lakh tonnes in October and 3.73 lakh tonnes in November, it rose to 5.8 lakhs in December and 8.5 lakh tonnes in January. The Government has, however, failed to meet the target of off-loading 5 million tonnes of wheat under the OMSS scheme during the current fiscal.

The higher OMSS prices announced today would turn out to be unattractive for the roller flour mills (RFMs). Besides, offtake is expected to come down with the arrival of the new wheat crop from April 1.