The Hindu Business Line : Wheat lessons

This has a reference to your editorial “Wheat faces the heat” (Business Line, February 13). It is necessary to increase the procurement prices to make it attractive for farmers to go for wheat cultivation under higher acreage and to increase the yield per hectare by constantly upgrading the farming techniques.

Every manufacturing industry produces goods at a particular cost, adds a profit margin and sells at a price which is higher than the production cost. It is only in agriculture that demand and supply conditions alone decide the market. In periods of bountiful supply, the farmer loses due to less remunerative prices and, in drought, though prices increase he has less produce to sell. In both ways, he is the loser.

The Government has been using the procurement price mechanism to enthuse the farmer to produce more. But in a globalised economy, we started using the imports route, thanks to the comfortable foreign exchange, to increase the availability of wheat and to keep the wheat prices under check.

This strategy impoverished the farmers, leading to unremunerative prices, debt and suicides. And it may not work forever as global wheat prices have also started increasing due to less production in big wheat exporting countries such as Australia, the US and Canada. The price of wheat and wheat products have , therefore, risen by around 80 per cent in the last one year or so.

The correct strategy is, therefore, to enthuse our farmers by giving them adequate support prices and by providing technological services that will help increase production.

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