India: Checking wheat price

Thanks to the Minimum Support Price (MSP) offered for wheat in the major states contributing to the Central pool, including Punjab, Haryana and Madhya Pradesh, the Union Government is in a position for the second time in two years to keep a check on the spiralling cost of the staple grain in the country. It is only because MSP is guaranteed for wheat that it is a lucrative crop and we have large swathes of wheat-sown fields, ensuring full and even overflowing granaries of the government, as per the weather-dependent yield. In view of this, it would not be wrong to say that paying MSP to the cultivators is as much an investment in basic food security as it is an assured price return for the toiling farmers. This ability to tide over a crisis-like situation lends weight to the 2020-21 protest by farmers, who demanded assured MSP for food crops and repeal of the ‘black’ farm laws, which the government was ultimately forced to withdraw.

Thus, with enough buffer stock in hand, the Centre has been able to offload 50 lakh tonnes of wheat in the market through the Open Market Sale Scheme within one month — 30 lakh tonnes, as decided on January 25, and 20 lakh tonnes on February 21 — to help cool off the soaring retail prices of wheat and its flour and bring relief to the common consumer. The scheme ensures a wide outreach as the sale of wheat is proportionately distributed among both public and private channels such as the FCI, state governments (for PDS) and flour mills, traders and bulk buyers and manufacturers of wheat products.

Amid the Ukraine-Russia conflict, it was because of the millions of tonnes of wheat acquired at MSP that India was among the few nations to avoid a food crisis last year. Unlike many countries that stared at price escalation by the disruptions in the global food supply chain and the fact that Russia and Ukraine are Europe’s bread basket, India sailed through smoothly. Last May, it had banned wheat exports to rein in its price and ensure roti on every table. The development of climate-smart wheat varieties that can beat the heat is another step in the right direction.

Tags: crop, yield, grain, prices, wheat, flour