India Raises Minimum Purchase Price of Wheat to Help Farmers

India, the world’s second-biggest producer of wheat, raised the minimum purchase price of wheat by 6.8 percent, the biggest increase in six years, to help farmers boost their earnings and enhance output.

The government will pay 1,735 rupees ($26.6) for 100 kilograms (220 pounds) of wheat, up from 1,625 rupees a year earlier, farm minister Radha Mohan Singh said in a tweet after a cabinet meeting on Tuesday. That would be the biggest increase since 2011-12, according to government data.

Indian Prime Minister Narendra Modi has been under pressure from opposition parties amid slowing agriculture growth and dwindling farm income, ahead of key state polls next month. The federal government, the single biggest buyer of food crops in the country, is key to determining incomes of over 70 percent of the 1.3 billion population that depends on farming for their livelihood.

Higher production will potentially deter imports by the world’s second-biggest consumer. Flour millers in southern India are buying the grain from Australia and Black Sea region even as local production probably climbed to record in 2016-17. India is seen importing 3.5 million tons of wheat in 2017-18, according to U.S. Department of Agriculture.

Minimum price of chickpea was raised 10 percent to 4,400 rupees per 100 kilograms while rate of lentil was increased 7.6 percent to 4,250 rupees, Singh said. Price of mustard, the biggest winter-sown oilseed, was fixed at 4,000 rupees, up from 3,700 rupees, he said.