Private traders stay away from wheat purchase this Rabi season in Punjab

Of the total 127 lakh tonne of wheat procured so far this season, private traders have purchased only 57,000 tonne, which is just 0.45%
By Gurpreet Singh Nibber, Chandigarh
PUBLISHED ON MAY 30, 2020 12:07 AM IST

Private traders stayed away from wheat purchase in the mandis this Rabi season, preferring the open market sale scheme (OMSS) of the Food Corporation of India (FCI) where they get it cheaper.

Of the total 127 lakh tonne of wheat procured so far this season, private traders have purchased only 57,000 tonne, which is just 0.45%. They bought 1.7 lakh tonne, ie 1.3%, of 131 lakh tonne in the corresponding period last season.

The dip in purchase by private traders is being attributed to OMSS as well as Covid-19, as wheat procurement was done by calling farmers to mandis in batches to maintain social distancing and avoid overcrowding.

“When we enter mandis, price goes up by Rs 10-20 per quintal even if we don’t make purchases in large quantities, benefiting the farmers,” said Mohinder Pal, a Rajpura-based trader who procures wheat on behalf of big companies such as Reliance and ITC.

“In OMSS, traders got wheat cheaper by Rs 200-250 per quintal and many stayed away due to the coronavirus pandemic. In OMSS, we have to sacrifice on quality as the FCI sold wheat of the previous season whereas in mandis fresh produce is available,” he added.

On Twitter, former chairman-cum-managing director of FCI Siraj Hussain said that the Punjab government’s purchase was 99.5% of total arrivals. He gave full marks to the officials engaged in procurement, pointing out that there were side effects – “private buyer have totally withdrawn from Punjab”.

Hussain, who also worked as the Union agriculture secretary, attributed lack of interest by traders to higher taxes imposed on wheat purchase in Punjab, which includes 2.5% ‘dami’ charged by commission agents and 3% rural development funds and mandi fee each. Private traders are also required to pay 2% additional over and above the minimum support price.

“There’s not much difference if private players have not entered the mandis. In the past also, their share was very negligible, which has seen a further slide this year,” said Anindita Mitra, director, food and civil supplies, Punjab. “We are happy that MSP has been paid to the farmers and this way a total of Rs 26,000 crore was pumped into rural economy,” she said.

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