India cabinet to mull raising state wheat purchase price

India's cabinet is likely to consider increasing the state's purchase price for wheat at its next meeting, federal Agriculture Minister Sharad Pawar said Wednesday.

The state-set purchase price provides a minimum price that farmers can plan on receiving from the sale of their grain to the government or private traders. Last year, the government fixed its purchase price for wheat at Rs10,800 (US$233) a tonne.

An increase in the state's purchase price would encourage farmers to sow more wheat. India harvested a bumper crop of 80.58 million tonnes of wheat in the year ended March 2009.

Pawar also said that summer-sown rice output in the two key states of Punjab and Haryana will be around last year's level, despite a drought in June and July.