The Hindu Business Line : The man behind the Centre's wheat woes

Chandigarh April 23 There is something quite incongruous about Mr Ajmer Singh Lakhowal. As Chairman of the Punjab State Agricultural Marketing Board (PSAMB) - a body overseeing the working of the State's 145-odd regulated markets - one would expect him to ensure that the mandis do good business.

But then, Mr Lakhowal also heads the Bharti Kisan Union (BKU) in Punjab, espousing the cause of its powerful agricultural community. And, it is in this capacity that he is urging farmers not to bring wheat to the mandis during the current marketing season (April-June). In other words, denying business to the same mandis that fall under the PSAMB's jurisdiction!

Grain commission agents here largely blame Mr Lakhowal for market arrivals in Punjab and Haryana trailing behind by roughly one-third so far this year. "He has convinced growers not to sell till they get at least Rs 1,140 per quintal, against the present Rs 850-870 levels. Quite a few have held back their wheat, believing they would receive the higher rates later," according to a trader.

Defer sales

Mr Lakhowal, nevertheless, sees no contradiction in his stance as BKU Chief vis-à-vis simultaneously holding the post of Mandi Board Chairman. "I have not told farmers not to sell, but to merely defer sales as far as possible and realise better prices. This does not in any way amount to a boycott of the mandis," he told Business Line here.

Further, delayed sales will actually benefit the Centre. "Why should the Government buy all its wheat in 1-2 months and incur inventory costs for the rest of the year? And, has anybody worked out the costs due to unnecessary congestion of the mandis and strain on transport and other infrastructure?" he quipped.

The right approach, Mr Lakhowal held, would be for the Centre itself to encourage staggering of sales. "The Government should, in fact, be grateful if farmers bear the holding cost it would otherwise incur. But this is not possible if you pay a uniform Rs 850. The procurement price should be variable and set at higher levels for later months, so that farmers have the incentive to gradually offload their crop," he argued.

Compensation sought

What is the logic for a Rs 1,140-rate? "In 1966-67 (when the Food Corporation of India was set up), the official wheat price was Rs 76. Since that period, Government salaries have gone up 55-70 times, while gold prices and corporate profits have climbed 50 to 100-folds. Our demand is simple: just compensate us for the increase in the general price index from 1966-67. And that comes to 15 times or Rs 1,140," Mr Lakhowal explained.

He was confident that given its precarious stock position and the difficulties of contracting large-scale imports, the Centre would eventually give in. Whether or not Mr Lakhowal's prophesy comes true is a moot point. But the farmers, for now, certainly seem to believe him.