On Monday the Government finalised import of 7.9 lakh tonnes of wheat to meet its buffer norms. Though import was expected, it is the price and timing that have surprised many. The Government claims it needs the wheat to meet its public distribution system requirements. In the backdrop of a good crop this year, the critics say it could have bought the wheat from farmers here if it had paid the same amount. SONU JAIN reads between the lines:

• Why are we importing wheat?

India is the world’s second biggest wheat consumer after China. For nearly a decade after the Green Revolution, India had sufficient stocks of wheat. So much so that by 2002, godowns were overflowing with rotting grain. But last year, the production fell drastically and the Government could not procure enough to even supply wheat for the PDS and its welfare programmes. Some private companies were also allowed to buy from farmers directly. As prices began to rise, the Government decided to import. Unfortunately, the same year, the crop in other wheat-growing countries did not too well either. Unfavourable weather damaged the crop in Australia, Europe, Russia and Ukraine, leading to the lowest global inventories in 26 years.

• What was surprising about the decision taken on Monday?

Barely two months ago, the Government cancelled a wheat import tender for 10 lakh tonnes on the excuse that $263 per tonne quoted by global suppliers was too high a price. On Monday, it decided to buy 7.9 lakh tonnes by paying 150 per cent more, or $390 per tonne. The Government says it is keeping an eye on the spiralling prices on the Chicago Board of Trade rather than its domestic prices, which are well within control at the moment. They do not want to take any chances with rising food prices anytime this year and the next.

... contd.