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Informist, Tuesday, Dec. 31, 2024

By J. Navya Sruthi

MUMBAI – After failure to meet the wheat procurement target for two years, Rajasthan and Madhya Pradesh are likely to announce a bonus of INR 125 per 100 kg on wheat for the second consecutive year, state officials and market experts said. 

The Rajasthan government has written to the Centre seeking permission to allow Food Corp. of India to procure wheat in the state at a bonus of INR 125 per 100 kg in addition to the declared minimum support price of INR 2,425 per 100 kg for the rabi marketing season of 2025-26 under the Rajasthan Krishak Samman Yojana, according to a letter seen by Informist.

The ruling Bharatiya Janata Party in Rajasthan and Madhya Pradesh had promised in their election manifesto last year that the state governments would give farmers a bonus of INR 125 per 100 kg over and above the minimum support price, Rahul Chauhan, director of IGrain India said.

During the 2024-25 (Apr-Mar) wheat procurement season, which started a month early in March and ended on Jun. 30, both the state governments announced a bonus of INR 125 per 100 kg over the minimum support price of wheat. With the Centre fixing the minimum support price for wheat at INR 2,275 per 100 kg for the 2024-25 season, the overall procurement price was INR 2,400 per 100 kg, including the bonus in these states.

The target for wheat procurement in Rajasthan during 2025-26 rabi marketing season has been set at 1.4 million tonnes, according to the letter. During the last rabi marketing season, 1.2 million tonnes of wheat was procured in Rajasthan, up 438,000 tonnes from the previous season. However, wheat procurement in Madhya Pradesh was 33% lower on year at 4.8 million tonnes during the last season.

The overall wheat procurement in 2024-25 was at 26.6 million tonnes, marginally above the previous year's purchase of 26.2 million tonnes, but sharply lower than the Central government's target of 30-32 million tonnes.

"While it benefits farmers in Rajasthan and Madhya Pradesh, it may put pressure on traders and millers, who would be compelled to buy wheat at higher government rates, potentially pushing up market prices," Chauhan said in a post on X, formerly Twitter. "Last year, similar steps led to consistently high wheat prices, causing difficulties for traders," Chauhan said.

However, some traders and wholesalers said there will not be any bonus in the upcoming rabi marketing season as the sowing of wheat is better than last year. They also said so far there were no weather uncertainties which have affected the rabi crop. However, rainfall and weather during January and March will play a very important role in wheat production this time. 

As of Monday, the area under wheat was up 2.2% higher on year at 32.0 million hectares, according to data from the Department of Agriculture and Farmers Welfare. The sowing also exceeded the normal for the season, which is 31.2 million hectares.  End

Edited by Saji George Titus

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