The Government may reconsider its plan to sell wheat at concession price to flour mills as they have not passed on the benefit to end consumers by bringing down retail prices.

Speaking on the sidelines of the function to launch Western Ghats Agro Growers Co. Ltd, K.V. Thomas, Union Food Minister, said: “We had offloaded wheat at a discounted price thinking that millers will reduce the price of flour and wheat products. That has not happened. They seem to have formed a cartel. 

“We will go back to the Cabinet to seek additional allocation of wheat for sale under OMSS (open market sale scheme),” he said.

Of the 30 lakh tonnes allowed for sale under OMSS to bulk consumers, Thomas said 23 lakh tonnes have already been sold at subsidised price, but prices of wheat products have not dropped. The Government had paid bonus and additional State taxes in addition to the minimum support price and offered it in open market sale scheme only to bring down retail prices, he said.

India harvested a bumper wheat crop of 93.90 million tonnes in the 2011-12 crop year (July-June), with government procuring a record 38 million tonnes. Assuring sugar companies that the Government will not follow ‘switch on and off’ policy in sugar exports, Thomas said even as sugar exports is put under open general licence (OGL), sugar companies prefer to sell in the domestic markets as they realise better prices here. On wide spread opposition on FDI in retail, Thomas said the Government has set up a committee headed by him to study the pros and cons of the decision and convince the State governments for its smooth roll out.

Even before the FDI is rolled out, the state governments have to amend the prevailing APMC Act to facilitate farmers to sell directly to companies. Though some progressive states have amended the APMC Act, it is mandatory to make foreign investments in retail attractive.

suresh.iyengar@thehindu.co.in

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