The government has denied allegations of providing benefits to foreign farmers at the cost of their Indian counterparts by paying the latter less and importing wheat at a higher price.
In a detailed affidavit filed in the Supreme Court, the Department of Food and Public Distribution has stated that while the government had in 2007 decided the minimum support price and bonus for Rabi marketing season of 2007-08 at Rs 850 per quintal, the price of US Soft Red Winter Wheat in Chicago was Rs 743.72 per quintal.
“Thus the price paid to Indian farmers is higher than the price paid in Chicago,” read the affidavit filed by the Department’s under secretary. According to the affidavit, the government increased the procurement prices to Rs 1,000 per quintal for the next procurement season. The amount does not include the bonus. The government hopes the increased price would be an incentive for farmers to cultivate more wheat and increase procurement.
The government’s affidavit is in response to a Public Interest Litigation filed by social activist Vandana Shiva who has challenged the import of wheat by the government. Shiva’s counsel Pinky Anand said the government was importing poor quality wheat from abroad and paying a higher price to the farmers there.
Defending its decision to import wheat, the department said it was imperative to do so because the wheat stock in the central pool was less than the buffer norms. While the total procurement of wheat in 2006-07 was just 92.27 lakh tonnes, the take-off was 117.07 lakh tonnes. Further, the total wheat demand under various distribution schemes floated by the government is around 150 lakh tonnes.
Justifying the decision not to float tenders in the domestic market, the affidavit said: “A domestic tender will withdraw supply of wheat from the open market, which will create a sentiment of wheat shortage. Such a sentiment may adversely affect market prices of wheat, particularly in the non-wheat producing states.”