The Hindu Business Line : 2010 View from the top

In the last couple of years, the roller flour mills have been going through a tough phase. First, they had to face supply shortage. This year, despite higher production they have not got the required wheat at the right price.

The New Year also holds promise of a record crop despite reports of lower acreage in Punjab and HaryanaBut it is too early to start counting the chickens before they hatch.

The federation welcomes the Government decision to cut the price of wheat being offered through the open market sale scheme by Rs 200 a quintal for bulk consumers. It will help the Food Corporation of India to sell some quantity of wheat. The prices of wheat products have already begun to come down after going up following the Government's announcement to sell wheat at its acquisition cost. The wheat user industry is hopeful of the New Year keeping the flour mills sector agile and competitive. As long as the Government keeps procuring huge quantities of wheat from the mandis, no other agency can plan and procure wheat. Even the creation of infrastructure for storage, handling cannot take place.The Government must announce a robust and transparent long-term policy so that a natural development of procurement machinery is developed for wheat.The industry does not need the open market sale scheme if such a transparent long-term policy is announced. Unfortunately, the announcement of the sale under the scheme this year contributed to an increase in the open market. Our federation had asked the Government to withhold announcement of sale under the scheme fearing the prices will go up.On research and development, it is high time the Government gave a mandate to the wheat researchers to develop high protein wheat varieties so that at times when we need to export, the farmers can get the right price.

A relaxation in the phyto-sanitary and plant quarantine norms this year would have helped the biscuit industry to import red wheat as it would have helped in controlling maida cost.

For the bakery industry, hard wheat is required. Unfortunately, the production is low and the prices have gone up. Import of Australian hard wheat has come to the rescue of the bakery industry in the present global scenario. Both imports and exports have a role to play for the industry. As for the Rs 1,100 a quintal minimum support price for wheat this year, the Government has sent the right signals for bulk consumers to procure during peak arrivals. It would also ensure wheat is available throughout the year with the Government's open sale scheme. The Government itself need not procure all the wheat this year since the buffer stocks with it would be higher in April.

The 2009 situation of farmers in Uttar Pradesh not getting the MSP of Rs 1,080 for most part of the year may not be repeated this year.

(As told to M.R. Subramani in Chennai)

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