People's Democracy(Weekly Organ of the Communist Party of India (Marxist)
May 21, 2006
Of Wheat Signals Erosion
following is the text of the letter written to union minister for agriculture,
public distribution, Sharad Pawar, by CPI(M) Polit Bureau member and MP
Brinda Karat on May 11, 2006 regarding the government decision to import wheat.
AM writing to you in the context of the government decision widely reported in
the press to import another 3 million tonnes of wheat over and above the five
lakh tonnes already imported since level of buffer stocks are low. I would like
to draw your attention to the statements made by you on the floor of the House
(Rajya Sabha) on February 24, 2006. This was in response to my question (starred
Question No. 101) regarding import of wheat. I would also like to draw your
attention to the answer tabled by your ministry in response to the unstarred
Question No. 2447 dated March 17, 2006 in Rajya Sabha
regarding specification for the standard of the wheat to be imported.
the lower procurement figures of wheat over the last few years, I had expressed
concern that this would have serious repercussions on food security as well as
the interests of the farmers. Unfortunately government has not paid sufficient
attention to the fact that production of wheat has not increased over the last
several years. On the contrary government has been encouraging diversification
from foodgrain production including wheat. I had asked for an assurance
regarding procurement targets for the rabi crop. In response, you had stated
that this year’s procurement of wheat would exceed last year’s and would
reach 162 lakh tonnes. This target itself is low and inadequate considering that
even in a drought year the procurement was 19 million tonnes. However from
reports it appears that in Punjab, for example, government procurement has been
poor and that even this low target may not be realised. Aggressive interventions
by private traders including companies like Reliance have resulted in their
being able to corner a much larger share of the grain that came to the market.
There are also reports that big foreign companies have entered the market
through agents. The private traders not only came into the market earlier than
official agencies but they had free access to go to different areas of the state
to purchase directly from farmers. It is not clear whether these companies were
given concessions as far as payment of mandi rates etc. are concerned which FCI
and other official agencies have to pay. In any case the private traders paid
rates higher than the MSP offered to the farmers.
is important to note that the higher market rates, which crossed 800 to 850
rupees a quintal in some areas of Punjab are still lower than the price paid to
foreign traders by the government of India and much higher than the MSP offered
including the increased bonus of fifty rupees offered on April 21.
So, although a section of the farmers has benefited through higher prices of
wheat paid by private traders in this season, the net result is that the
government’s procurement policy has been completely marginalised, the clout
and manipulating capacity of private trade has increased and the import of wheat
signals a dangerous erosion in food self-sufficiency and self-reliance which is
not in the national interest. It is also to be noted that another statement made
by your ministry on the same date (February 24, 2006; Starred Question No. 118) “that since the new crop would
be in the market by end of March the (high prices of wheat) would soften” has
not happened. Private traders who have gained control of the new crop will
manipulate prices even further to increase profits at the cost of the consumer.
Thus wheat prices in the market are still high and consumers are suffering.
There is widespread concern that this gross food mismanagement will lead to a
further cut down in the public distribution system and the quantities of food
required to ensure food security and to meet the requirements of various
foodgrain based schemes. I, therefore, request you to kindly inform the House
about the steps taken by the government to implement the aforesaid statements
regarding procurement and control of rising prices.
other most shocking aspect is that not only were the rates of wheat imported
higher than that paid to Indian farmers but also the standards of wheat imported
have been lowered to specifically suit the foreign companies. In reply to the
Unstarred Question No. 2447 mentioned above, your ministry had given a list of
the minimum standards to be maintained in the quality of the wheat imported.
However it is reported that the government permitted non-compliance of standards
in the wheat imported from Australia for inexplicable reasons.
There is also disquieting information about the pressure by the US lobby
to change the tender specifications to suit the interests of American companies
and facilitate import from the US, demands which have been accepted by the
government. The adverse effect on the interests of Indian farmers, Indian
agriculture and Indian consumers is a matter of deep concern.
view of the above, I request you to kindly clarify the issues at the earliest.