The Hindu : New Delhi News : Brinda Karat seeks probe into wheat imports

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Thursday, Sep 20, 2007
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New Delhi

Brinda Karat seeks probe into wheat imports

Special Correspondent

Seeks reversal of government policies , fixing of responsibility

‘Foreign traders paid up to Rs. 16,000 a tonne’
‘Increasing MSP will benefit traders not farmers’

NEW DELHI: CPI(M) Polit Bureau member Brinda Karat has demanded an inquiry into the circumstances leading to import of wheat at high prices, which she said had caused a huge loss to the exchequer.

In a letter to Food and Agriculture Minister Sharad Pawar on Tuesday, she sought the reversal of government policies and the fixing of responsibility.

She asked the Minister why the Empowered Group of Ministers (EGoM) decided to go in for import in April third week when rabi procurement operations had just commenced. “How could a shortfall in procurement be projected when procurement operations had just begun? Does this mean that the decision was pre-meditated? The decision to import [50 lakh tonnes] wheat [in April] being arrived upon while procurement operations were on would have certainly sent wrong signals to the public procurement agency.”

Referring to Mr. Pawar’s letter to MPs on wheat import, Ms. Karat said that an indication in the letter that international wheat prices shot up following the publication of the United States Department of Agriculture estimate, confirmed the apprehension that the international grain market was not a competitive market and that the USDA wielded “enormous market power” in grain trade.

“Dependence on wheat imports, therefore, weakens our food security by making it vulnerable to speculation and manipulation of prices in the international market.”

“The government has now imported wheat at much higher prices than what was prevailing in April-May. The crux of the matter, therefore, is that the STC and the government speculated on a softening of wheat prices at a later date and caused a loss to the national exchequer in the process. The question is who will take responsibility for this loss?”

Ms. Karat said the government must also assess whether its decision to announce its full requirement for imports initially and then staggering the process of wheat imports had contributed to pushing up of prices in the international market.

“From the Indian farmers’ point of view, the reality is that the government paid to the foreign traders exorbitant prices up to nearly Rs. 16,000 a tonne while the MSP was only Rs. 8,500 a tonne. The government has paid around Rs. 800 crore more to the foreign traders.” On Mr. Pawar’s stand that increasing the minimum support price at this stage would only benefit traders as they had sold their produce by now, she said the real issue was that when the government found that the traders were cornering stocks by offering prices marginally higher than the MSP, appropriate steps could have been taken, including announcing a bonus.

This would have benefited them and precluded the possibility of expensive imports at a later stage.

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