Russia-Ukraine Conflict: Uttar Pradesh Farmers Set To Profit From Soaring Wheat Prices in Open Market

Wheat prices on the open market have risen far higher than the minimum support price (MSP) provided to Uttar Pradesh farmers, owing to the Russia-Ukraine conflict.

This issue has arisen as the Yogi Adityanath administration prepares to begin procuring wheat at MSP on April 1 for the 2022-23 procurement season.

According to those who knows, the continued high market price of wheat is positive for farmers, who will earn a better price for their crop this year perhaps from private players. The state government would save a significant amount of money and time that would otherwise be spent buying wheat from farmers at the MSP.

According to sources close to the situation, wheat prices on the international market have risen to an all-time high as a result of the current Russia-Ukraine conflict. Wheat is selling for as much as Rs 2300- Rs2500 per quintal in Uttar Pradesh mandis, which is much more than the MSP of 2015 per quintal.

Russia is claimed to be the world's largest exporter of wheat. Ukraine is also one of the world's leading wheat exporters. With the two nations at odds, India is looking to sell wheat to other countries.

"Wheat prices have skyrocketed in various countries, including India, since they have boosted wheat export. Wheat export from Russia and Ukraine has been damaged owing to the nations' war," an agriculture department official added.

Uttar Pradesh is India's major wheat producer. More than 30% of the country's total wheat crop is produced in the state. This year's wheat output in the state is expected to be higher as well.

"It will be a win-win situation for farmers and the government if the market price of wheat remains higher than the MSP even after the fresh harvest of wheat begins to arrive in mandis." Farmers will be paid a fair price for their produce, and the government will be able to reduce its subsidy payments," a food department official stated.

Farmers selling their produce to private players were fine with the government, he added, as long as they got a higher price than the MSP.

In a meeting headed by chief secretary DS Mishra next week, the food and civil supplies department is likely to provide a presentation on the new wheat procurement policy. The presentation will take place before the Cabinet approves the procurement policy for 2022-2023. The conference is also likely to address the high wheat prices on the open market, which will be included into the final policy.

The new policy might set the year's wheat procurement target at roughly 60-65 lakh MT, with a specific emphasis on purchases made through point-of-sale devices.

The Centre set the wheat MSP for the procurement season 2022-23 at Rs 2015 per quintal in September 2021. This was a Rs 40-per-quintal increase over last year's Rs 1,975 MSP when UP made the highest-ever MSP wheat purchase at around 58 lakh MT.