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Harish Damodaran

NEW DELHI, May 3

THE Centre may have announced a minimum support price (MSP) of Rs 620 per quintal for wheat during the 2002-03 rabi marketing season (April-June). But for farmers outside Punjab and Haryana, this rate is proving to be a mere mirage, with open market prices of wheat currently ruling up to Rs 110-120 per quintal below the MSP in many parts of northern India.

In the National capital, wheat dara is quoting at Rs 580-590 per quintal, which is around the levels prevailing during this time last year. In the neighbouring Hapur mandi of Ghaziabad, prices are ruling at Rs 545-548 per quintal, which is even below last year's corresponding range of Rs 560-570 per quintal.

And if one goes further eastwards to Bareilly, Etah, Mainpuri, Kanpur, Hardoi or Shahjahanpur, wheat is selling in loose at Rs 505-510 per quintal. In Sitapur, open market prices have fallen to as low as Rs 490-500. The MSP of Rs 620 per quintal is a reality only in select few mandis such as Saharanpur, where the Food Corporation of India (FCI) or State Government agencies have opened centres for purchasing wheat from farmers.

In most other mandis in UP, farmers are having to reconcile themselves to an average price of Rs 500-510 per quintal, which is closer to the official MSP of Rs 510 per quintal declared way back for the 1998-99 marketing season! In Rajasthan, wheat is being sold now at Rs 570 per quintal in major markets like Alwar.

Indeed, never before has the disparity in fortunes between farmers in Punjab/Haryana and those outside the two States been as stark as it is now. As on Friday, the FCI and State agencies have procured a total 148.13 lakh tonnes (lt) of wheat in the current marketing season, of which the bulk has been from Punjab (87.46 lt) and Haryana (52.76 lt). The Government agencies have mopped up almost the entire cumulative mandi arrivals of 87.59 lt and 52.78 lt, respectively in these two States.

On the other hand, official procurement in Uttar Pradesh has so far been a paltry 1.93 lt, out of total recorded mandi arrivals of 1.96 lt. The official figure for arrivals in UP is obviously a gross underestimate, considering that the State's estimated wheat output this year is around 26 million tonnes (mt), which is higher than Punjab's 15.5 mt or Haryana's 10 mt. The 1.93 lt figure, officials concede, basically refers to the arrivals in those handful of mandis, where the FCI or State agencies happen to be physically present.

The only fortunate farmers outside Punjab and Haryana — apart from the few who can access the select `FCI mandis' in their regions are those located in areas bordering the two States. For example, farmers in UP's Mathura-Kosikalan belt, bordering the Palwal-Hodal mandis of Haryana, are currently realising a price of Rs 555-565 per quintal, which is higher than the Rs 500-510 per quintal price prevailing elsewhere.

There are quite a few traders who are said to be making a quick buck by purchasing wheat from farmers in the border areas of UP at Rs 555-565 per quintal and selling it to arhthias (commission agents) in neighbouring Haryana mandis for Rs 600-605. The arhthias, in turn, are delivering the same wheat to FCI at Rs 620 per quintal!

With almost 100 per cent of the market arrivals in Punjab and Haryana devolving on Government agencies, it is only the wheat from UP, Rajasthan and Madhya Pradesh that is actually being `traded' across the country. Wheat from Hardoi is currently available for about Rs 710 per quintal in Bangalore, Rs 715 per quintal in Coimbatore and Rs 720 per quintal.

A trader buying loose wheat at Rs 505 per quintal in Hardoi would incur a cost of nearly Rs 50 per quintal on various mandi-related charges (arhthia's commission, labour charges, purchase tax, market fee, etc) and another Rs 20 per quintal on bagging. After adding rail transport cost of around Rs 104 per quintal to Bangalore, he can still hope to make a neat Rs 30 per quintal profit.

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