Macaroni factories will purchase durum wheat from farmers directly this year at prices negotiated between the two sides.
Based on the agreement, factories will buy their wheat requirements at rates 10% higher thnt the government’s guaranteed purchase rates, according to the deputy head of the National Wheat Farmers Foundation.
“So far, all macaroni factories have signed contracts with wheat farmers who produce durum wheat. These farmers are highly satisfied with this decision and want it to also encompass the purchases of common wheat and flour,” Aliqoli Imani was quoted as saying by Mizan News.
The official added that bakers and flour producers have also asked the government to allow them to buy the wheat they need directly at negotiated prices, stressing that this would eliminate middlemen.
“This method is highly beneficial to the government as well, since it reduces the financial load imposed by guaranteed purchases on its limited resources,” he said.
This year, the government will buy common and durum wheat at the rates of 25,000 rials ($0.15) and 26,000 rials ($0.16) per kilo respectively from local farmers as part of its guaranteed purchase plan. The figures show a 47% increase compared with last year.
After a new round of negotiations, the government reformed the previously set prices to make them closer to the annual inflation.
Ataollah Hashemi, the head of National Wheat Farmers Foundation, says the reform came after holding sessions in which the message of farmers’ dissatisfaction with this year’s wheat prices was conveyed to government administrations and officials.
“Fortunately, our efforts paid off and prices were raised on par with the annual inflation rates,” Mehr News Agency quoted him as saying.
Hashemi noted that this year’s wheat production will hit 14 million tons that are sufficient to meet the entire domestic demand.
“There was no decrease in wheat production last year either, but due to low guaranteed prices, farmers refrained from selling their harvest to the government,” he added.
In February, Hashemi said that if the Economic Council, which had set the price, does not revise this price, imports will become necessary to meet domestic wheat demand.
Wheat harvest has begun in the south of the country where the weather is warm and dry. A ceremony was held in Bushehr Province’s Dayyer County on Saturday to celebrate what is estimated to be a bountiful yield.
Esmaeil Esfandiarpour, the official in charge of Wheat Project— the government program to purchase the crop from farmers at a guaranteed price—who was present at the event, said yields are going to be high due to the high level of precipitation this year.
The official added that the government aims to purchase around 10.5 million tons of the grain from farmers.
CEO of the Government Trading Company Yazdan Seif said 280 quadrillion rials ($1.75 billion) are required to purchase this amount of wheat this year (started March 20).
“Around $750 million of this sum will come through revenues earned from targeted subsidies, $687.5 million will be borrowed from the Central Bank of Iran and the banking system, and the rest will be provided by GTC,” Seif was quoted as saying by ILNA.
Affiliated to the Agriculture Ministry, GTC is the official government body in charge of guaranteed wheat purchases.
