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Concerns Over Wheat Price rise in the Country
Context
Addressing the questioning on subsequent Rise in prices of Wheat and related products in last few months, the Department of Food and Public Distribution Secretary has mentioned that the price rise is not abnormal and will intervene only if required.
About
Why have the wheat prices gone up?
- Free foodgrains scheme: Union government in the aftermath of the covid pandemic has been running a 5kg per month free foodgrains scheme.
- No selling of FCI stocks in the open market: When wheat (or rice) prices start going up, the government sells FCI stocks in the open market to cool down prices. That hasn’t happened this year, primarily because of the free foodgrains scheme.
- Export of wheat: During the first five months (April-August) of the financial year 2022-23, Indian wheat exports have doubled from last year’s level.
- India exported 43.50 lakh metric tonnes (LMT) of wheat during April-August 2022-23, which was 116.7 percent more than the corresponding months last year.
- Impact of the Russia-Ukraine war: The majority of the wheat export was done during October 2021 – Feb 2022 period. This means that countries that do not produce enough wheat began to stock up once the chances of Russia attacking Ukraine went up.
- Import of wheat by Egypt: This has led to private wheat traders stocking up on wheat from the open market, pushing up prices.
- Fall in production in India: India's wheat production is projected to have declined nearly three percent to 106.84 million tonnes in the 2021-22 crop year.
Key Points related to Wheat:
- This is the second most important cereal crop in India after rice.
- It is the main food crop, in the northern and north-western parts of the country.
- Wheat is a rabi crop that requires a cool growing season and bright sunshine at the time of ripening.
- The success of the Green Revolution contributed to the growth of Rabi crops, especially wheat.
- Macro Management Mode of Agriculture, National Food Security Mission, and Rashtriya Krishi Vikas Yojana are a few government initiatives to support wheat cultivation.
- Temperature: Between 10-15°C (Sowing time) and 21-26°C (Ripening & Harvesting) with bright sunlight.
- Rainfall: Around 75-100 cm.
- Soil Type: Well-drained fertile loamy and clayey loamy (Ganga-Satluj plains and black soil region of the Deccan).
- Top Wheat Producing States: Uttar Pradesh > Punjab > Haryana>Madhya Pradesh > Rajasthan> Bihar>Gujarat.
Suggestive measures
- Open Market Sale Scheme (OMSS): OMSS refers to the selling of food grains by government/government agencies at predetermined prices in the open market from time to time.
- This can reduce the burden on price levels and keeps less fluctuating wheat prices.
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