Indian Officials: Bonus Price for Wheat Planned

NEW DELHI -- India is planning to pay a one-time bonus price for wheat to farmers, over and above the minimum state-fixed purchase price, as it wants to build stock, two food ministry officials said Monday.

The government is considering a bonus of 500 rupees ($11) a metric ton, apart from the minimum purchase price of 11,200 rupees a ton, one of the officials, who didn't want to be identified said.

The food ministry will seek the cabinet's approval for the proposal soon, he added.

India's wheat stock is at 19.37 million tons as of February 1, nearly double the country's annual buffer requirement, but the government is considering a bonus as it wants to ensure that it has sufficient stock to meet a food security law that widens subsidized sales to the poor.

The bonus price is usually announced before harvest and isn't a part of the minimum purchase price.

State-run Food Corporation of India and other government agencies start procuring wheat from April 1.

India is expecting a bumper wheat harvest of 81.47 million metric tons through June 2011, aided by favorable weather and record acreage under harvest. It harvested 80.8 million tons of wheat last year, the government estimates.

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