Iran increases guaranteed price for wheat purchase by 50%
Iran has increased its price for purchasing wheat from local farmers by 50% for the new harvesting season that will begin in June next year.
Iran’s new agriculture minister Javad Sadati Nejad said on Tuesday that the guaranteed price for purchase of wheat had been fixed at 75,000 rials per kilogram during a meeting of senior government officials held a day earlier.
Sadati Nejad said the price announcement is meant to encourage farmers to increase wheat production before they start to cultivate the crop in autumn.
He said the government had bought less than five million metric tons of wheat from local farmers in the current harvesting season, nearly half the target set under its guaranteed purchase price (GPP) scheme.
The newly-appointed minister, who took office last week, said lower wheat purchase this year was mainly due to a drought that had caused significant reduction in yields in dryland farms.
The Iranian government uses GPP mainly for wheat and several other major crops to ensure food security in the country and to cut back on staples imports.
However, wheat imports have increased in recent years from countries like Russia and Germany as experts insist low GPPs announced by the government have caused local production to decrease.
That comes as the guaranteed price of wheat purchase for the current harvest season had increased two times under a former administration. The current GPP is in fact three times higher than a price announced in September last year.
Sadati Nejad said imports of wheat and other crops would face tougher regulation in the upcoming years with a new law that puts the agriculture ministry in charge of the Government Trading Corporation.
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