The Hindu Business Line : Fresh curbs likely on pvt purchase of wheat in UP

New Delhi May 10 Uttar Pradesh continues to be a thorn in the Centre's flesh, as it struggles to secure sufficient wheat to beef up its precarious inventory position.

For the current 2007-08 marketing season (April-June), the Centre had targeted purchases of 15 lakh tonnes (lt) from the State, which is slated to produce 255 lt or over a third of the country's estimated wheat crop of 735 lt. But as on Thursday, Government agencies have mopped up a mere 73,879 tonnes.

The Bareilly division alone (which also includes Pilibhit, Shahjahanpur and Badaun districts) was expected to deliver 4.14 lt, whereas actual procurement so far has been 19,897 tonnes. Similarly, the Moradabad division (also covering Bijnor, Rampur and Jyotiba Phule Nagar) have contributed just 3,300 tonnes against the anticipated 1.66 lt. There are major mandis like Hapur and Gajraula, where the agencies have not managed even a truckload, with officials virtually reduced to swatting flies or playing cards.

Bulk buying ban

All this, despite the authorities resorting to every conceivable measure to bring in the grain. Unlike last time, the Mandi Parishad at Lucknow has not issued companies such as ITC bulk purchase licences to buy directly from the fields. Since the second week of April, private buyers have been banned from loading wheat in rail rakes (2,500 tonnes capacity, against the 10-15 tonnes for trucks). In Shahjahanpur and Badaun, the district magistrates are learnt to have even informally instructed mandi personnel not to issue gate passes to traders, unless they delivered 10 per cent of the wheat as `levy' at the official Rs 850 per quintal rate.

And now, it is the Centre's turn to get into the act. Having already made it compulsory for all traders purchasing over 50,000 tonnes to report stocks on a weekly basis, the Food Ministry is planning to ask private buyers to furnish proof of payment of the four per cent value added tax (VAT) and 2.5 per cent market fee imposed by the UP Government.

Off-mandi deals

"Our understanding is that a lot of wheat is not coming to the mandis and traders are contracting directly with the farmers. Our agencies are losing out because they are paying the 6.5 per cent levies, which the traders are evading through off-mandi transactions. This is illegal and we are going to come out with an order within a day or two," an official told Business Line.

The order is being drafted in consultation with the Law Ministry. "We are also looking at reducing the stock declaration limit from the existing 50,000 tonnes," he added.

Till date, 5.3 lt of wheat has arrived in UP's mandis during the current season, which is lower than the 6.37 lt in the corresponding period of 2006-07. "For a State producing 255 lt, this is truly baffling, more so when there have been years with official procurement alone touching 25 lt," the official noted.

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