With the domestic inflation rate touching seven per cent and a tightening in the global market on the availability of wheat and rice, a deeply worried Central government has decided to form a Strategic Reserve of five million tonnes of food grains, over and above the buffer stock, to meet emergency situations.
The Centre will bear the entire procurement and storage cost of this grain. It will also set up an Oversight Committee to monitor the purchases of imported wheat on weekly or fortnightly basis.
The Strategic Reserve will consist of three million tonnes of wheat and two million tonnes of rice. This will be met from surpluses of domestic stocks after meeting buffer norms and through weekly or fortnightly imports. This is to ensure that there is no cartelisation and artificial jacking up of international prices as was done last year in the case of wheat.
The imported wheat for the Strategic Reserve will be at "reasonable rates" and as per the quality norms already set by the Ministry of Agriculture and Health. A public sector undertaking, either the MMTC or the STC, will undertake wheat imports.
The Empowered Group of Ministers headed by Pranab Mukherjee with Agriculture Minister Sharad Pawar and Finance Minister P. Chidambaram as members among others, advised this strategy. The issue was also discussed in the meeting of the Cabinet Committee on Prices chaired by Prime Minister Manmohan Singh last week.
In the last two years India has imported about 7.3 million tonnes of wheat to build up buffer stocks and contain domestic prices that registered a steep hike. International wheat prices also escalated by about 100 per cent in one year following a drop in the output as Australia, a major wheat exporting country, suffered two successive droughts. At the same time, the exportable surpluses of rice in the world this year are said to be the lowest in recent years.
The Centre will bear the entire procurement and storage cost of this grain. It will also set up an Oversight Committee to monitor the purchases of imported wheat on weekly or fortnightly basis.
The Strategic Reserve will consist of three million tonnes of wheat and two million tonnes of rice. This will be met from surpluses of domestic stocks after meeting buffer norms and through weekly or fortnightly imports. This is to ensure that there is no cartelisation and artificial jacking up of international prices as was done last year in the case of wheat.
The imported wheat for the Strategic Reserve will be at "reasonable rates" and as per the quality norms already set by the Ministry of Agriculture and Health. A public sector undertaking, either the MMTC or the STC, will undertake wheat imports.
The Empowered Group of Ministers headed by Pranab Mukherjee with Agriculture Minister Sharad Pawar and Finance Minister P. Chidambaram as members among others, advised this strategy. The issue was also discussed in the meeting of the Cabinet Committee on Prices chaired by Prime Minister Manmohan Singh last week.
In the last two years India has imported about 7.3 million tonnes of wheat to build up buffer stocks and contain domestic prices that registered a steep hike. International wheat prices also escalated by about 100 per cent in one year following a drop in the output as Australia, a major wheat exporting country, suffered two successive droughts. At the same time, the exportable surpluses of rice in the world this year are said to be the lowest in recent years.
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