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Flour mills seek wheat at Rs 650/qtl

Chitra Phadnis

BANGALORE, July 2

THE Southern roller flour mills have been facing one problem after another because of the lack of a stable wheat policy. Added to their woes are the conflicting interests with the northern industry which has a better bargaining power, being clsoer to the Centre. The Souther Roller Flour Mills' Association President, Mr M.K. Dattaraj spoke to Business Line about what the southern mills expect from the Government. Excerpts:

*FCI has 44 million tonnes of wheat and offtake is still low. Why is this happening?

Because of differential pricing. In the North, FCI open market sale price is Rs 650 (it is available in the mandi for Rs 600-610), while in the south, it is Rs 720. Yesterday, I bought purchased wheat from the mandi at Rs 705. Nobody is going to FCI beca sue of this faulty pricing mechanism.

*Faulty pricing mechanism has been a problem for a long time...

The Ministry announced an open price of Rs 700 all over the country for June. Even then, only the southern millers were lifting wheat. But suddenly, due to pressure from the northern industry, they increased it to Rs 720 in the south and reduced prices t o Rs 650 in the North. Our confederation members as well as millers from Maharashtra are very upset at this discrimination in prices. It should be the same rate all over the country -- Rs 650.

*If there is a same rate all over the country, how will it benefit you?

Even if rates were equal, Northern millers would continue to get it at cheaper rate at Rs 600-610 from the mandi. Equal prices would benefit the general public, who could get wheat products at the same price all over the country.

Traditionally, the customers for FCI have always been the south. Everyone talks of the customer being the king...we are the FCI's permanent customers. At least to liquidate their own stocks, they should be doing everything that is required for the

customer and not discriminating against us. By giving wheat at Rs 650 there will be good offtake in south. Historically, only millers in the south, west and east have helped the FCI liquidate its stock.

*Why do you think the price discrimination is happening?

Because of the northern lobby pressure. Even at Rs 650 they will not lift stocks, but by increasing rates in south, we cannot either.

*But why is the northern industry lobbying for a lower rate even though they are not lifting from FCI?

They want to dump their wheat products in the south. When the government can offer wheat at the same rate Rs 430 to exporters anywhere in the country, why should there be discrimination in open sale for the south?

You also seem to have a problem with the quality ...

In all southern states, the quality is very inferior.

Wheat is stored in the open on plinths. Some stock may be good. But despite directions from the higher authorities the ground staff at the godowns insist that we pick up poor quality wheat to save their own skin.

*Meaning..?

It is their duty to see that timely fumigation is done, torn tarpulins are replaced and so on. If they are negligent and have allwed the wheat to get spoilt, they dump it on our head.

*What about your plea for allowing exports?

No action has been taken. We wanted the Central Government to allow us to buy wheat at export rates (Rs 430) and export wheat products. In the last one year, several representations have been made to the Food Ministry but still no decision has been taken .