Date:22/08/2008 URL: http://www.thehindu.com/2008/08/22/stories/2008082255331400.htm

National

Centre plans to offload wheat in the open market

Gargi Parsai

NEW DELHI: With the inflation rate touching 12.63 per cent, the Centre decided on Friday to offload 60 lakh tonnes of wheat, from the central pool, in the open market to enhance availability during the coming festival season and to contain prices.

This would be done after meeting the requirements of the Targeted Public Distribution System and setting aside 40 lakh tonnes of buffer stock (on April 1) and 30 lakh tonnes of reserve stocks, made possible through record procurement this year at over 225 lakh tonnes against 111 lakh tonnes last year.

Order extended

At the same time the Centre has extended till April 4, 2009 the order imposing limits on stocks and free movement of wheat, pulses and rice. The order will now cover paddy also as there are reports that millers in some States were hoarding paddy in the hope that they may gain if the minimum support price was enhanced to Rs. 1000 a quintal as demanded.

Authorising the Ministry of Food and Public Distribution to undertake the Open Market Sale Scheme (OMSS) through the Food Corporation of India (FCI), the Union Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Manmohan Singh that met here on Friday, said “the quantity to be released, the timing of intervention and the locations” would be decided by the Ministry based on the recommendation of the Committee of Secretaries.

Additional allocation

Giving details to The Hindu, Union Food and Public Distribution Secretary T. Nand Kumar said the government would sell 60 lakh tonnes (six million tonnes) in the open market. Of this, 10 lakh tonnes would be additionally allocated to States for the Above Poverty Line (APL) population.

The rest would be for retail sale through the State governments and for bulk consumers (bread, biscuit manufacturers and roller flour millers) through open tendering.

Mr. Nand Kumar said that the likely timing of the open sale of wheat would be from the beginning of September, keeping in view the possibility of a flare-up in prices during the festival season.

The pricing would not be lower than the minimum support price of wheat (Rs. 1000 a quintal) plus transportation cost.

The high-level committee of the FCI, chaired by its chairman-cum-managing director Alok Sinha, will decide the cost of the wheat released to State governments as also for bulk consumers through open tenders.

The CCEA also decided that the policy guidelines approved for OMSS of wheat would be followed for the open sale of rice as well.

However, Ministry sources said although the procurement of rice was higher than last year at 267 lakh tonnes, there was no proposal yet to offload rice in the open market.