MP: KAMAL NATH’S PROBLEM OF PLENTY
The Centre refuses to lift the state’s full stock of wheat
The cash-strapped MP government will have to pay for nearly 8 lakh tonnes of its 75 lakh tonne wheat procurement this marketing season if the Union food ministry pays for only 67.25 lakh tonnes it had agreed on. This is because MP announced a bonus on the minimum support price (MSP), in violation of a 2014 Union government circular that forbade bonus on MSP as it did not want wheat to be dumped because of a higher procurement price.
This could become a contentious issue between the BJP government at the Centre and the Congress government of Kamal Nath in MP. The chief minister met Prime Minister Narendra Modi last fortnight and also sought Union agriculture minister Narendra Singh Tomar’s intervention in directing the Food Corporation of India (FCI) to lift the entire stock. “The CM has been urging the Centre to resolve the issue for the farmers’ benefit,” says state Congress spokesperson Shobha Oza.
This year, MSP for wheat was fixed at Rs 1,840 per quintal, on which the MP government offered a bonus of Rs 160 per quintal. If FCI does not lift the full stock, MP will have to
shell out over Rs 160 crore for the additional stock.
The Centre lifts stocks equivalent to a state’s PDS (public distribution system) requirement, which in MP’s case is about 30 lakh tonnes. But, based on sown area and production, the Centre and state had arrived at a quantity of roughly 67 lakh tonnes for MP to procure. The extra wheat is sent to other states.
However, in 2018, the year the state had an assembly election, the Shivraj Singh Chouhan government had announced a bonus of
Rs 265 per quintal for that year and a retrospective bonus for the previous year which farmers were given in 2018. The Centre, interestingly, seemed to have had no issue then.
So, what will MP do in case all its wheat is not lifted? “It can sell the wheat in the open market and largely recover the amount spent procuring it. Mandis offer almost the same price for wheat as the MSP,” says an agriculture department official. What it cannot recover is the amount spent on bonus payments. Besides the bonus on wheat sold to the government, Chouhan had extended the bonus to wheat sold to private traders (about 20 lakh tonnes) too.