Iranian MP bashes gov't for buying wheat from domestic farmers at low price

Business Materials 30 September 2014 17:07 (UTC +04:00)

Tehran, Iran, Sept. 30

By Milad Fashtami - Trend:

MP Mohammad Esma'eelnia criticized Iranian government for buying domestic farmers' wheat at low price.

Deputy Chairman of Iran's Majlis (Parliament) Commission of Agriculture said the government buys each kilograms of wheat at the price of 11,550 rials (some $0.36 based on the exchange rate of US dollar at the free market), Iran's IRNA News Agency reported on September 30.

He went on to note that the rise is not in line with the country's inflation.

"The experts' evaluations suggest that the fair price would be 13,000-13,500 rials," the MP said, advising the government to revise the price.

Iranian media reports suggest that due to the low price, farmers are not willing to sell their wheat to the government and prefer to sell to private buyers.

Iranian government has purchased 6.654 million metric tons of wheat worth 70.29 trillion rials (some $2.273 billion based on the exchange rate of USD at the free market from domestic farmers from the beginning of the current Iranian calendar year (March 21) so far, Iran's IRNA News Agency reported on September 14.

The figure shows 40 percent increase compared to previous year.

Iran has so far paid 97 percent of its total debt to domestic wheat farmers.

The Iranian government has set up 712 centers for purchasing wheat from farmers in 31 provinces.

Iranian Ambassador to Moscow Mehdi Sana'ee said on September 9 that his country is ready to import 10 million metric tons of wheat from Russia.

Deputy Agricultural Jihad Minister Abbas Keshavarz said in August that Iran will not be able to reach self-sufficiency on wheat production in the next four years.

By producing 10.5 million tons of wheat, Iran reached self-sufficiency in wheat production in 2004 and during the presidency of Mohammad Khataai. But according to Iran's current president, Hassan Rouhani, the country's output decreased by one million metric tons per year since 2004 and now the country needs to import 7.2 million tons to meet its domestic demands.

According to Food and Agriculture Organization of the United Nations (FAO), Iran produced 14 million tons of wheat in the previous calendar year (which ended on March 20).

However, during Mahmoud Ahmadinejad's presidency Iran reportedly submitted false reports to Food and Agriculture Organization of the United Nations (FAO) in regards to the country's wheat output.

Iran customs administration's reports suggest that Iran imported 3.5 and 6.7 million metric tons of wheat in the calendar years of 1392 (which ended on March 20, 2013) and 1391 (which ended on March 20, 2012), respectively. Ahmadinejad's administration had put the production rate of the mentioned years at 13.5 and 14 million metric tons.

It is while Iran's wheat imports in the calendar year of 1390 (ended March 20, 2011) were around 233,000 metric tons. So the country's imports were increased by 30 times in 1391.

Iran imported 1.4 million metric tons of wheat in the first two months of the current year (March 21 - May 20).