Finally, some sense prevailed on the comatose Manmohan administration as it has decided to allow the food ministry's proposal to offload 10.5 million tonne food grain rotting in the of FCI godowns in the open market to control retail prices.
"The CCEA has approved allocation of 10 million tonne wheat and 0.5 million tonne rice from FCI godowns for sale under the open market sale scheme," food minister KV Thomas said after the Cabinet meeting.
The FCI has huge stock of 77 million tonne of foodgrain, against the storage capacity of around 74 million tonne. However, the proposal on allowing extra 2 million tonnes wheat export through public sector trading agencies was not listed on the CCEA agenda for discussion. Out of 10 million tonne wheat, 8.5 million tonne will be sold from Punjab and Haryana to bulk consumers at Rs 1,500 per quintal, while 1 mt wheat will be offered from Food Corporation of India centres across the country to small traders at Rs 1,500/quintal plus freight.
About 4,00,000 tonne wheat would be allocated to states for distribution to retail consumers and 1,00,000 tonne grain to co-operative at the same price plus freight. Besides wheat, Thomas said the CCEA has approved allocation of about 5,00,000 tonne rice to states for retail consumers at Rs 1875 per quintal plus freight. The total subsidy for 10.5 million tonne foodgrain would be Rs 5,491 crore, sources said.
The decision to release foodgrain in the open market will help in containing prices of wheat and rice, which have firmed up slightly as private traders are aggressively buying wheat directly from farmers at higher than support price to meet their export demand, experts said. This has led to lower procurement of wheat by state-run FCI and holding of stocks by farmers in anticipation of better prices in the coming months, they said, adding all these factors are impacting prices of wheat in the local markets.
