Bonus can be given on wheat purchase in Rajasthan and Madhya Pradesh, what will be the effect on the markets.

25-Dec-2024 11:50 AM

Expected Bonus announcement and its impact on market
Rajasthan and Madhya Pradesh are likely to offer a bonus on wheat procurement during the Rabi season of 2025-26.
In Rajasthan, if bonus of Rs. 125 is announced on Minimum Support Price (MSP) then wheat will be procured from ₹2,425 per quintal to ₹2,550 per quintal.
In Rajasthan, Farmers can register for MSP wheat sales from January 1 to June 25, with government agencies buying wheat from March 10 to June 30.
However, the bonus scheme could affect market dynamics.
While it benefits farmers in Rajasthan and Madhya Pradesh, it may put pressure on traders and millers who would be compelled to buy wheat at higher government rates, potentially pushing up market prices.
Last year, similar steps led to consistently high wheat prices, causing difficulties for traders.
The key issue is why farmers in major wheat-producing states like Uttar Pradesh, Punjab, Haryana, and Gujarat are excluded from this bonus. Ideally, wheat procurement should be uniform across India at the same price to ensure equity.