Govt grants Rs 55 bonus on wheat support price

At a nine-million tonnes procurement, the additional outgo will be about Rs 495 crore. Given this additional outgo on account of bonus, the Government was also considering raising the issue price of wheat through the public distribution system, Barnala said.

The decision to grant the additional bonus came two days after the chief ministers of four northern states — Punjab, Haryana, Rajasthan and Delhi –jointly met Prime Minister Atal Behari Vajpayee to press their demand for an increase in the minimum support price for wheat. While Haryana demanded Rs 615 per quintal, Punjab’s demand was Rs 610.

Barnala said the farmers always claimed higher prices "as they have worked hard in their fields and taken risks". When asked if Punjab’s Chief Minister Prakash Singh Badal, who is from the same party as the Food Minister, was happy with the decision, Barnala said he had not spoken to Badal yet.

Market analysts, however expressed surprise at the level of the central bonus. They said that given the reigning market prices of wheat were about Rs 450 per quintal, the Government’s procurement price of Rs 510 was inexplicable. When asked about this difference, Barnala said that it was precisely for this reason they were expecting a higher procurement. On production estimates, he said that figures were yet to come in. He, however, said that he worried as "inclement weather has caused severe damage". From Madhya Pradeshthere were reports of a good crop, but hailstorms have affected crops in over 10,000 villages. In Punjab too there has been large-scale damage.