In Punjab, crop worth its grain in gold

Persevere to reap. This holds true for a tiny percentage of wheat growers in Punjab who thought it made better business sense to hold on to their crop beyond the procurement season...

Persevere to reap. This holds true for a tiny percentage of wheat growers in Punjab who thought it made better business sense to hold on to their crop beyond the procurement season, which ended on July 15 this year. Punjab produces about 145 lakh metric tonnes of wheat every year and its contribution to the national pool is approximately 80 per cent.

While the government price or the minimum support price for wheat is Rs 850 a quintal, wheat prices in Punjab have now begun to soar. While last year the price averaged around Rs 1,050 a quintal between July and December 2006, this year the prices are already hovering around the Rs-1,000 mark. As on July 14 this year, wheat prices in Khanna Mandi, Asia’s largest grain market, touched Rs 1,000 a quintal. Four days later, the rate has settled down to a “firm and realistic” Rs 970 per quintal. What’s more, commission agents at the Khanna Mandi are sure wheat prices will not fall any further.

So what’s fuelling the price rise? Explaining the phenomenon, Dr P.S. Rangi, marketing expert and a member of the Punjab Farmers’ Commission, says, “Whenever India and China, among the leading producers of wheat, show an inclination that they are ready to buy wheat from the international market, the prices soar. Now that India is importing 5 lakh metric tonnes of wheat at a very high price of approximately Rs 1,370 per quintal, farmers think the government’s MSP is too low and hope to sell it at higher rates.”

Raj Sood, a private trader at Khanna Mandi, says, “Around 1,000 quintals a day reach the mandi but with a national shortage of around 6 lakh tones, the crop fetches a good price.” But Sood clarified that only local traders buy wheat from farmers. “No one from outside Punjab picks up the grain since the transportation costs are very high.”

While Dr Rangi says that about five lakh metric tonnes of wheat is up for sale in Punjab, Director Agriculture B.S. Sidhu puts the figure at around 10 lakh metric tonnes. “This is not an official figure but on an average, around 90 lakh metric tonnes come to the market every year. However this year, it was around 80 lakh tonnes. The overall production has been the same as that of last year — 145 lakh metric tones — so we can say that farmers in the state have stored about 10 lakh metric tonnes of wheat.”

On farmers getting a good price for their crop, Sidhu says, “The fact is that farmers in Punjab are now closely watching market trends and actually following them. Though not all the 10 lakh farming families of Punjab can afford to hold back their grains, around 4 per cent of the farming population can keep a part of their produce.”

Pal Singh of Ghan Khurd village in Moga district says, “Last year around November, I sold my crop for Rs 1,300 a quintal. This year too, I will wait till I get at least this price, which should come by November or December. At present, I have offers of Rs 1,000 a quintal but I will still wait.”