‘A jolt to local business’: Traders slam MP government’s clauses to take part in wheat bidding process

The tender floated by the MP government to sell the wheat procured in 2019-2020 stated that interested parties will have to bid for a minimum of one lakh metric tonnes. Also, the companies bidding have to have a net worth of Rs 1 crore and monthly production capacity of 25,000 metric tonnes.

The Madhya Pradesh government’s move to sell 2 lakh metric tonnes of wheat to larger companies instead of opting for an open tender allowing small traders to participate in the process has upset the state’s flour millers who have called the decision ‘a jolt to local business’ that was already reeling under the impact of Covid-induced curfews.

The tender floated by the MP government to sell the wheat procured in 2019-2020 stated that interested parties will have to bid for a minimum of one lakh metric tonnes. While the companies bidding should have a net worth of Rs 1 crore, they should also have a monthly production capacity of 25,000 metric tonnes. The two clauses meant that nearly 50 millers from state were left ineligible for the bidding.  At the same time, it kept the base price at Rs 1,580 per quintal for wheat that was procured at the rate of Rs 1,840 per quintal

In the letter to the state government, president of Sakal Anaj Dalhan Tilhan Vyapaari Mahasangh, Gopaldas Aggarwal, pointed out that small traders are willing to purchase the same stock at Rs 1,700 per quintal. “From the clauses of your tenders, it seems like the government had made a successful attempt at profiteering specific traders. Had the intention of the government been clear than such a tender could not be floated,” he wrote.

Sunil Aggarwala, the president of Madhya Pradesh Rollers Flour Millers Association, demanded that the two conditions should be relaxed. The association stated that traders should be allowed to bid for a minimum of 5,000 metric tonnes and that flour mills with a production capacity of 2,500 metric tonnes and with their mills located within MP should be allowed to participate in the bidding process.

In the letter to the government, the flour millers requested that with the changes in the clause of the tenders, nearly 200 flour mills, with a cumulative monthly production capacity of 20 lakh tonnes, should be allowed to participate in the bidding.

Speaking to The Indian Express, Sunil Aggarwala said, “The clause is a big jolt for the local industries as it ensures a lower price for the multinationals. These companies will either export it or sell it outside the state. Had local traders been allowed, it would have benefitted the state and boosted local business.”

The government had floated the tender for the sale of old stock of wheat which was procured in 2019-2020. The government had bought 77 lakh metric tonnes of wheat of which 70 lakh was taken up by Food Corporation of India.

Principal Secretary for Food and Civil Supplies, Faiz Ahmed Kidwai, told The Indian Express, “The government’s decision to opt for firms with a higher net worth aims to stop smaller traders from re-selling the stock to the government and get a higher MSP as the auctioning process would coincide with wheat procurement.”

He further explained that while the government has kept the base price at Rs 1,580 per quintal, the bidding would be at a higher rate than the base price.

However, CPI leader Badal Saroj pointed out that only two companies have finally made the cut.  “The clause of the tender has led to the formation of cartels and it is unlikely that the government will get any higher rates than the stipulated base price,” he added.

However, Kidwai pointed out that the stock that has been put up for sale was only a small part with the remaining stock yet to go up for bidding.

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