Government Sets New Benchmarks: Wheat and Rice Reserve Prices Get a Boost

In a strategic move aimed at balancing market demand and ensuring food security, the central government has announced a notable upward revision in the reserve prices of wheat and rice from its national stock. This development comes at a time of robust harvests and bulging granaries, with the nation’s food reserves hitting record highs.

Key Highlights of the Price Hike

• Wheat:
  
  • The reserve price for wheat stands at ₹2,550 per quintal for the upcoming year, marking an 11% increase from the previous rate of ₹2,300 per quintal.
    
  • This price will remain valid until June 30 next year and applies to all crop years, including the current rabi marketing season.
    
• Rice:
  
  • The reserve price varies by buyer, ranging from ₹2,320 to ₹3,090 per quintal.
    
  • Effective November 1, rice with 25% broken grains will be priced at ₹2,890 per quintal (a 3% increase).
    
  • For state governments and ethanol distilleries, the reserve rates will go up to ₹2,320 per quintal.
    
  • Custom milled rice under the Rice Milling Transformation Scheme for open market sales moves up to ₹3,090 per quintal.
    
• Coarse Grains:
  
  • Bajra: ₹2,775 per quintal
    
  • Ragi: ₹4,886 per quintal
    
  • Jowar: ₹3,749 per quintal
    
  • Maize: ₹2,400 per quintal
    

Understanding the Rationale

• Alignment with MSP:
  
  • The increase in rice reserve prices mirrors the higher minimum support price (MSP) for paddy, which rose by 3%.
    
  • The wheat reserve price hike surpasses the MSP increment, which went up by 6.6% for the upcoming season.
    
• Strong Harvests and Surplus Stocks:
  
  • Wheat production has reached an all-time high, with volumes soaring to approximately 117 million tonnes this year.
    
  • Procurement for public stocks has also topped previous years, ensuring food grain availability across the country.
    
  • Central storage is abundant, with over 37 million tonnes each of rice and wheat stocked as of the beginning of June, alongside significant reserves of unmilled paddy and coarse grains.
    

Implications for the Market

• Food Inflation Check:
  
  • By fine-tuning reserve prices and cautiously releasing grain stock, the government aims to maintain market stability and prevent spikes in food prices.
    
• Efficient Resource Management:
  
  • The ample supply allows flexibility in open market releases, efficiently balancing domestic requirements and stock maintenance.

With full granaries and a proactive pricing strategy, the government is poised to navigate the delicate equilibrium between farmers’ interests, consumer needs, and market dynamics. The timely revision of reserve prices not only reflects confidence in national food security but also reinforces the commitment to keeping inflation in check while sustaining farmer welfare.