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Farmers sell standing wheat to beat government directive

Farmers in Punjab and Haryana have pulled up a smart one on the government. Faced with reports that the Centre was set to issue a directive banning private traders from lifting wheat stocks from grain markets for the procurement starting April 1, many have already sold their standing crop to companies.

With the government offering lower prices, some farmers in the two states, known as the breadbasket of India, have even taken advance money from companies and private traders and committed their produce this season to them.

The companies are offering a higher price – ranging from Rs900 to Rs1,000 per quintal – to farmers for their wheat. This is much higher than the minimum support price of Rs.750 plus a bonus of Rs100, making it Rs850 per quintal this year.

Harvesting of wheat has commenced in some areas whereas in others, following freak rainfall over the region twice in March, the crop is yet to dry up completely.

“I don’t even need to go to the ‘mandi’ (grain market) to sell my produce this year. My entire stock will be picked up by a leading company in the next few days.

Why should I be forced to sell to government agencies for a lower price when the private ones are paying much higher?” asked Swaran Singh, a farmer near Sirhind town who owns 15 acres of land.

Singh says he does not want to be at the mercy of government agencies to sell his produce like previous years. “They used to harass us a lot over quality. The prices offered were low. We had to wait in the mandis for several days. They payments used to come after months. Nothing of that sort now.”

There are other farmers in the two states whose produce has been booked by companies and advance has been paid already.

“If I am getting all my money sitting at home, why should I face harassment at the grain markets? The private companies are paying higher prices too,” said Udham Chand of Kurukshetra district in Haryana.

Companies like ITC, Cargill India and others have been smart enough to book their wheat stocks directly with farmers in their fields. This has happened in several districts of Punjab and Haryana.
Bigger companies like ITC are said to have booked over 500,000 tonnes of wheat already with farmers.

Private traders and commission agents are trying for more bookings with a lot of bread and other food product manufacturing companies already lining up to purchase wheat stocks.

The central government has declared its intention not to allow private traders and companies to lift stocks from grain markets for at least the first few days so stocks of government agencies like the Food Corporation of India do not remain empty.

This situation was faced by the government last year too when almost 20-25% of wheat arrivals in the grain markets of both states were lifted by private players at higher prices than the minimum support price of Rs650 being offered by government agencies.

The result was that buffer stocks of the government fell short of targets and the government had to import 500,000 tonnes of wheat from other countries at a much higher price of Rs1,100.

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