Pawar takes battle over wheat deal to rival camp
Union agriculture minister Sharad Pawar is widely known for his political acumen. And on Thursday, he showed it in ample measure when he sought to turn the tables on the BJP- and the NDA-ruled states on the wheat import controversy.
By TNN |
MUMBAI: Union agriculture minister Sharad Pawar is widely known for his political acumen. And on Thursday, he showed it in ample measure when he sought to turn the tables on the BJP- and the NDA-ruled states on the wheat import controversy.
At a marathon press conference that went on for one hour and a half, a visibly defensive Pawar blamed the previous NDA rule and its “marginal” contribution towards the central pool of wheat for the huge shortfall in the public distribution system (PDS) stocks and the subsequent decision to import.
Mr Pawar even vouched for the quality of wheat, saying the red-wheat was fit for human consumption as most wheat-growing countries produced this variety. “The variety of wheat consumed in India is grown only in Australia and some parts of the USA. But Australia had drought last year which closed its export options and the US variety did not meet India’s phyto-sanitary standards,” he explained.
Mr Pawar admitted to a shortfall in the central pool due to a low procurement, but held the NDA and the NDA-ruled states squarely responsible for the dismal state of affairs. “During the NDA’s six-year rule, the minimum support price for wheat remained virtually stagnant. The average hike that the NDA gave in five years was only Rs 50 per quintal. A low MSP dissuaded farmers from growing wheat, which resulted in a low yield,” Mr Pawar said. He, however, acknowledged that the country had surplus stock of wheat during the NDA rule.
“But the NDA government emptied the godowns by making available a large chunk of wheat and rice for export to traders at a subsidised rate lower than the price at which it is supplied to BPL consumers. This cost the exchequer a huge loss of Rs 16,245 crore,” he claimed.
Mr Pawar pointed out that it was the UPA government that revised upwards the MSP to protect farmers’ interests. “In the past three years of the UPA rule, wheat farmers have been given a substantial hike of Rs 370 per quintal. A lucrative MSP led to a record production of 746 lakh tonnes in the country,” he added.
Acknowledging a low procurement despite a record yield, Mr Pawar singled out the NDA-ruled states for causing the shortfall in the central pool. The FCI could procure only 111 lakh tonnes against the central pool requirement of 150 lakh tonnes, he admitted.
“Of these 111 lakh tonnes, Punjab and Haryana contributed around 95% to the central pool while the states ruled by the BJP, the NDA, or parties other than the UPA constituents gave only 3%. States like Uttar Pradesh, which is the largest producer of wheat, contributed only 5.3 lakh tonnes. Gujarat made a zero contribution. Bihar gave only 8,000 tonnes and Madhya Pradesh 57,000 tonnes,” Mr Pawar said. He expressed astonishment as to where the stocks in the NDA-ruled states had gone.
“The BJP, which is accusing the government of allowing private traders to purchase wheat, should clarify who purchased the stock in its states. And the decision to allow private purchase of wheat was that of the NDA government,” he countered.
At the same time, the BJP- and NDA-ruled states had asked for 83.5 lakh tonnes under the PDS, which the UPA government had released, he said. “The marginal contribution by these states and their demand for PDS stocks caused the shortfall in the central pool. This situation left the government with no choice but to import,” Mr Pawar added. He said the decision to import was taken by the empowered group of ministers under defence minister Pranab Mukherjee.
In May 2007, the State Trading Corporation (STC) rejected the first tender for import, which worked out to around Rs 1,050 per quintal because the trend in the global market suggested that the price could soften after August 2007.
Another reason to cancel the tender was that the FCI’s internal assessment estimated that domestic farmers still had stocks of 10 lakh tonnes, which were ready to sell for a better MSP, Mr Pawar said. “So, we declared a bonus of Rs 50 per quintal and purchased 10 lakh tonnes. By cancelling the import tender, we also saved Rs 250 crore,” the minister pointed out.
But the agriculture minister was rather unconvincing in his arguments about the second tender for imports floated by the STC within a month, which cost the government almost 45% more than the cancelled one. “Prices in the global market keep on fluctuating. It’s not an unusual thing,” was all he said when asked the reason why the government went for costly imports.
At a marathon press conference that went on for one hour and a half, a visibly defensive Pawar blamed the previous NDA rule and its “marginal” contribution towards the central pool of wheat for the huge shortfall in the public distribution system (PDS) stocks and the subsequent decision to import.
Mr Pawar even vouched for the quality of wheat, saying the red-wheat was fit for human consumption as most wheat-growing countries produced this variety. “The variety of wheat consumed in India is grown only in Australia and some parts of the USA. But Australia had drought last year which closed its export options and the US variety did not meet India’s phyto-sanitary standards,” he explained.
Mr Pawar admitted to a shortfall in the central pool due to a low procurement, but held the NDA and the NDA-ruled states squarely responsible for the dismal state of affairs. “During the NDA’s six-year rule, the minimum support price for wheat remained virtually stagnant. The average hike that the NDA gave in five years was only Rs 50 per quintal. A low MSP dissuaded farmers from growing wheat, which resulted in a low yield,” Mr Pawar said. He, however, acknowledged that the country had surplus stock of wheat during the NDA rule.
“But the NDA government emptied the godowns by making available a large chunk of wheat and rice for export to traders at a subsidised rate lower than the price at which it is supplied to BPL consumers. This cost the exchequer a huge loss of Rs 16,245 crore,” he claimed.
Mr Pawar pointed out that it was the UPA government that revised upwards the MSP to protect farmers’ interests. “In the past three years of the UPA rule, wheat farmers have been given a substantial hike of Rs 370 per quintal. A lucrative MSP led to a record production of 746 lakh tonnes in the country,” he added.
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Acknowledging a low procurement despite a record yield, Mr Pawar singled out the NDA-ruled states for causing the shortfall in the central pool. The FCI could procure only 111 lakh tonnes against the central pool requirement of 150 lakh tonnes, he admitted.
“Of these 111 lakh tonnes, Punjab and Haryana contributed around 95% to the central pool while the states ruled by the BJP, the NDA, or parties other than the UPA constituents gave only 3%. States like Uttar Pradesh, which is the largest producer of wheat, contributed only 5.3 lakh tonnes. Gujarat made a zero contribution. Bihar gave only 8,000 tonnes and Madhya Pradesh 57,000 tonnes,” Mr Pawar said. He expressed astonishment as to where the stocks in the NDA-ruled states had gone.
“The BJP, which is accusing the government of allowing private traders to purchase wheat, should clarify who purchased the stock in its states. And the decision to allow private purchase of wheat was that of the NDA government,” he countered.
At the same time, the BJP- and NDA-ruled states had asked for 83.5 lakh tonnes under the PDS, which the UPA government had released, he said. “The marginal contribution by these states and their demand for PDS stocks caused the shortfall in the central pool. This situation left the government with no choice but to import,” Mr Pawar added. He said the decision to import was taken by the empowered group of ministers under defence minister Pranab Mukherjee.
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In May 2007, the State Trading Corporation (STC) rejected the first tender for import, which worked out to around Rs 1,050 per quintal because the trend in the global market suggested that the price could soften after August 2007.
Another reason to cancel the tender was that the FCI’s internal assessment estimated that domestic farmers still had stocks of 10 lakh tonnes, which were ready to sell for a better MSP, Mr Pawar said. “So, we declared a bonus of Rs 50 per quintal and purchased 10 lakh tonnes. By cancelling the import tender, we also saved Rs 250 crore,” the minister pointed out.
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But the agriculture minister was rather unconvincing in his arguments about the second tender for imports floated by the STC within a month, which cost the government almost 45% more than the cancelled one. “Prices in the global market keep on fluctuating. It’s not an unusual thing,” was all he said when asked the reason why the government went for costly imports.
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