Govt to cut wheat sale prices

However, due to the higher prices fixed by the ministry – Rs 690 a quintal in FCI’s north zone, Rs 747 in south zone, Rs 725 in west zone and Rs 748 in east zone – lifting by millers has been almost negligible, officials said.

"The ministry is currently contemplating lowering of the earlier fixed prices, besides lifting the ceiling on purchase by a miller," they said. FCI currently maintains an additional stock of fivemillion tonnes of wheat despite high costs involved in maintaining the inventory.

The food grain stocks has risen to 33.35 million tonnes, including 11.13 million tonnes of rice as on July 1. The wheat stock had touched 22.20 million tonnes following the record procurement of over 14 million tonnes by FCI and other state government agencies.

Government has been forced to take a re-look at the norms governing open market sale as its grand plan of hiking the wheat allocation to families below the poverty line (BPL) by 50 per cent from the existing 10 kg per family, failed to find favour with the cabinet, sources said.

The proposal mooted as an one-time exception by the food ministry also envisaged a subsidy outgo of around Rs 1,600 crore and 36 lakh tonnes of additional wheat outgo from the central pool.

"There is an urgent need to reduce the wheat stocks from FCI godowns to make space for rice, procurement of which would start from October," officials said.

The food ministry, while permitting FCI tounload one million tonnes of wheat in the domestic market had said that corporation could sell a minimum of 10 tonnes to a miller and maximum depending upon the installed capacity of the mill.

Meanwhile, government has begun to collect a special levy of Rs 10 per tonne on rice exports, which can be reimbursed, in an effort to discourage fly-by-night operators from registering for exports of the commodity or claiming export benefits.

"We have begun to collect the special levy from April onwards to check needless registration of rice exports and stopping some unscrupulous elements from claiming export benefits," official sources said today.

A major reason for the government to take the decision on collecting the levy was due to exporters registering 70 lakh tonnes of rice for exports with the Agricultural and Processed Food Export Development Authority (APEDA) during the 1998-99 financial year. Exporters have to register with APEDA to ship rice from the country.