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Sharp cut in APL wheat, rice prices -- 2 million t allocation for wheat product exports

Our Bureau

NEW DELHI, July 10

IN a bid to liquidate its burgeoning foodgrain stocks, the Centre on Tuesday announced a 26.5 per cent reduction in the issue prices of both rice and wheat channelised to the above poverty line (APL) population through the public distribution system.

The APL rate has been slashed from Rs 1,130 per quintal to Rs 830 per quintal for rice and from Rs 830 per quintal to Rs 610 per quintal in the case of wheat. The issue prices of grains for the below poverty line (BPL) segment has, however, been retained at the existing Rs 565 per quintal for rice and Rs 415 per quintal for wheat.

``The new (APL) rates will be valid till March 31, 2002 or till surplus stocks last, whichever is earlier,'' an official statement released after a meeting of the Union Cabinet here stated.

The decision to slash APL rates has been taken keeping in view the massive decline in PDS offtake levels, following the move in the 2000-01 Union Budget to hike grain prices for APL families so as to cover the Food Corporation of India's (FCI) entire `ec onomic cost' of procurement and distribution.

This, in turn, led to APL offtake plummeting from

73.95 lakh tonnes (lt) in 1998-99 to 73.81 lt in 1999-2000 to a mere 18.49 lt last year for rice, with the corresponding figures for wheat being 53.27 lt, 27.44 lt and 3.08 lt, respectively. And since the APL segment accounted for roughly 60 per cent of total rice offtake from the PDS (the figure for wheat was 60 per cent in 1998-99 and 26 per cent in 1999-2000), the fall in APL lifting also ended up reducing overall foodgrain offtake from 233.40 lt in 1999-2000 to just 179.47 lt in 2000-01.

As a result, FCI was saddled with total foodgrain stocks of 604.08 lt as on June 1, comprising 375.47 lt of wheat and 228.61 lt of rice. The aggregate stocks are likely to have crossed 650 lt by July 1, as against the required minimum buffer norm of 243 lt for that date.

The Government has also been under pressure to reduce APL prices in the wake of its decision to supply wheat and rice to exporters from FCI's godowns at BPL rates. The decision to slash APL prices by 26.5 per cent will help temper the criticism over the Government `favouring' foreign buyers at the expense of domestic PDS consumers.

Sops for flour millers: Meanwhile, in a separate decision, the Cabinet also decided to allow FCI to offer wheat from the Central pool to roller flour mills for the purpose of export of wheat products (atta, maida and suji). A quantity of up to 20 lt wil l be made available to mills for wheat product exports during 2001-02.

The `base price' of wheat for this purpose will be fixed by FCI's High Level Committee under its Chairman, Mr Bhure Lal. The Cabinet also decided that the wheat will be supplied to the mills provided that the products exported by them will constitute at least 65 per cent of the wheat lifted by them from FCI. Normally, for every 100 kg of wheat processed, there would be around 25 kg of bran, five kg of atta, 10 kg of suji and 60 kg of maida. Millers feel that the prospects for export are mainly in maida.

The Department of Food and Public Distribution has also been asked to evolve a mechanism to ensure that wheat made available to millers for export of products is not illegally diverted to the domestic market. Currently, FCI is supply wheat to millers und er the open market sale scheme, wherein the prices have been pegged at Rs 650 per quintal for the North zone, Rs 695 per quintal for the West zone, Rs 710 per quintal for the East zone and Rs 720 per quintal for the south zone.