NEW DELHI: After reports emerged that private traders in southern India had begun importing wheat, the Food Ministry has forwarded a proposal to the Commerce Ministry to impose a 10 per cent import duty on the foodgrain to curb cheaper imports.
Wheat is available in the domestic market for Rs. 18.50/kg while the imports, mainly from Australia, are pegged at Rs. 17/kg. There is no import duty on wheat at present.
“We have suggested that a 10 per cent duty on wheat imports be imposed since there is surplus stock. The proposal has been sent to the Commerce Ministry,” Ram Vilas Paswan, the Union Food Minister, told reporters here on Friday.
The Minister added that there was no quality issue with the wheat procured by the Food Corporation of India (FCI) and it was wrong to believe that lustre-lost grain was unfit for human consumption.
Quality norms had been relaxed after standing crop had been damaged by unseasonal rain and hailstorms between February and early April. “There is no problem with the quality of wheat in terms of consumption even if the grain is shriveled, broken or has lost lustre,” he said.
The FCI, the nodal agency for procurement and distribution of the foodgrain through the public distribution system, has a stock of 40.35 million tonnes (mt) as of early June. The agency has procured nearly 28 mt of wheat in the current marketing year.
An import duty is likely to help the Centre get rid of the inferior quality that has been procured although flour millers and traders have been looking to take advantage of lower global prices. Around 0.5 mt of Australian wheat is believed to have been contracted so far.
“We received reports that traders have contracts for at least 3 lakh tonnes of wheat, largely from Australia. The proposal has the backing of the Agriculture Ministry and we should hear from the Commerce Ministry next week,” said a Ministry official.
India produced 90.78 mt of wheat in 2014-15, down from a record 95.85 mt the previous year.
The dues owed by sugar mills to sugarcane farmers are being cleared at a slow pace, said the official. Arrears of Rs. 21,000 crore at the end of April have only reduced to about Rs. 18,000 crore as of this week.
Mills in Uttar Pradesh account for more than half the outstanding amount and owe the State’s cane growers Rs. 9,154 crore. Maharashtra’s farmers are owed Rs. 3,316 crore while mills in Karnataka have payments worth Rs. 2,112 crore left to make.
“We have tried to help the sugar industry in various ways, from raising import duty to providing soft loans worth Rs. 6,000 crore and ensuring better returns for ethanol. The issue will be discussed further when we meet with States’ food ministers on July 7,” said Paswan.
