Demand for restoration of freight subsidy on wheat

Last Updated: Tue, Dec 11, 2012 03:54 hrs

Flour millers in southern states have petitioned the central government to restore the freight subsidy on wheat sold from Food Corporation of India (FCI) godowns in non-producing states. The subsidy was withdrawn last month, after millers in the producing states of Punjab, Haryana and Madhya Pradesh complained they were paying more (thanks to local taxes) than their counterparts in purely consuming states. As a result of the withdrawal, says the Roller Flour Millers’ Association of India, there’s been a rise of about Rs 300 a quintal on wheat purchase in the southern states.

Wheat can be bought in the open market from anywhere, but this is costlier than the price from FCI godowns. If buying from the latter, it has to be bought from the nearest godown in the state.

Adi Narayan Gupta, president of the millers association, said the food ministry should allow the millers to purchase wheat from any FCI outlet in India. Vinod Bansal, vice-president of the Roller Flour Millers’ Association of Karnataka, said mills in the state had been operating at only 40-50 per cent capacity since the revision. “The railway freight from Ludhiana is close to Rs 365 a quintal, which is exorbitant,” he complained.

State Wheat price 
(Rs per quintal)
UP 1,403
MP 1,411
Haryana 1,441
Punjab 1,485
Tamil Nadu 1,725
Karnataka 1,750

K S Kamalakannan, president of the Roller Flour Millers’ Association of Tamil Nadu, said his members were abstaining from FCI wheat and buying from the open market, paying an extra Rs 100 a quintal. The decision to do so, he said, was to pressurise the central government, which has a problem of excess wheat stocks, with the new crop due to arrive in March. With the burgeoning stocks, the food ministry might have to again offer some incentives to consuming states, to expedite the milling of wheat in godowns.

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