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Iran may pay world prices to wheat growers-paper

TEHRAN: The Iranian government is considering paying local wheat growers world market prices for their grain rather than current lower fixed rates, daily Iran newspaper reported on Saturday.

It quoted Minister of Agriculture Issa Kalantari as saying the plan would bring more investment to the agriculture sector and help encourage production.

"Based on the new plan of the agriculture ministry, wheat produced by the country's wheat growers will be purchased based on world prices," he told the daily.

According to the paper, Kalantari also proposed changing current policies on the importation of agricultural products.

"By importing cheaper agricultural products, the government has kept the domestic production at a low level, which has consquently reduced the volume of investment," the daily quoted him as saying.

He said investors could get better returns by putting their money in a bank.

Iran produced around 12 million tonnes of wheat in the 12 months to March 20, 1999, according to a ministry of agriculture report. It said this represented an average 7.9 percent increase each year since 1988, when Iran produced six million tonnes of the grain.

Nonethless, Iran is forced to import large amounts of wheat to meet growing domestic demand caused by a population boom.

In 1988, the country imported between 2.5 million and three million tonnes of wheat, mainly from Europe and the Pacific.-Reuters