The increase in the wheat support price by Rs100 to Rs1,300 per maund has fallen below farmers’ expectations. Normally, such an increase comes to cover either the cost of production or the cost of living. Farmers complain the current increase has failed on both accounts.
The cost of production has gone much higher in the three years than provided by this increase. If it was meant to cover the general inflationary trend, it has failed even more. In the last three years, the official rate of inflation has hovered around 10pc, whereas the current increase is only a little over 8pc after three years — the last increase in 2012 and the current one would become operational in May 2015 when official procurement starts.
The farmers claim that the cost of production has escalated at a much faster pace due to the government policies than the compensation package through support price mechanism. In the last few years, four factors have contributed to the escalating investment on production: devaluation of rupee, general sales tax, power crisis and gas shortage.
