Govt may extend duty-free wheat import beyond Dec 2007

NEW DELHI: The government may extend the duty-free import of wheat for private trade to augment the domestic supply of the food grain and keep prices under check.

"I see no problem at the official level to push that recommendation," Food Secretary T Nanda Kumar said while referring to the Roller Flour Millers Federation's (RFMF) demand for duty-free wheat import by private trade beyond December 2007.

He was speaking at the federation's Annual General Meeting here on Monday.

On RFMF's appeal to the government not to go ahead with the proposal of duty-free imports of wheat products such as atta, maida and suji, Nanda Kumar said it would not be required if wheat prices are at a comfortable position.

"I do not understand why you (flour millers) want wheat and not wheat products at zero duty... As of now we have not decided on it. But if we see a huge rise in prices of flour we may do it," he said.

The normal market price this year has been reasonably stable and the consensus is that it would remain stable during the year, he observed.

Nanda Kumar asked the flour millers to maintain the price line throughout the year till new crop arrives in the market.

The secretary also informed that the government was looking at the option of 'food coupon' to contain the leakages and diversion from public distribution system (PDS).

"We are looking at working out, on an experimental basis, the food coupon scheme, which is being run in countries like Brazil and Sri Lanka. The proposal is being discussed in the ministry," he said.

Asked about Central Vigilance Commission's (CVC) inquiry into the wheat imports, he said: "They (CVC) asked some questions and we have replied."

On flour millers' demand to withdraw power of states to impose the stock limits, Nanda Kumar said: "We cannot take powers from the state government, which have been given after due deliberations and considerations".

Referring to a demand of exempting wheat and wheat flour from Value Added Tax, the food secretary favoured zero per cent duty on wheat products.

He stressed on cooperation form flour millers on issues like management of wheat economy and minimising the leakages, diversion of foodgrain from PDS and fortification of wheat being sold in the open market.

The secretary noted the Roller Flour Millers were not connected to farmers, denying themselves an opportunity to procure wheat directly in states where APMC Act permits them to do so.

Speaking at the occasion, Food Corporation of India Chairman and Managing Director Alok Sinha said there would be no need to operate the Open Market Sales Scheme as wheat prices in the market are comfortable.

The federation's outgoing President Prem Gupta asked government to make a distinction between hoarding and holding of stocks.

"We purchase wheat as raw material and stock it for our production plans, aiming to avoid price aberrations thus ensuring stabilisation of wheat product prices for honouring our long-term commercial commitments. This by no means can be attempted to be interpreted as hoarding of stocks," he said.