New Delhi: Farmers of Punjab and Haryana will start bringing their wheat crop to the market this week and a number of private companies and agents spread out in villages offering significantly higher prices for their produce than the government''s procurement agencies.

The government has raised the support price for this year to Rs850 a quintal, which includes a Rs-100 bonus, from Rs650 last year. Private companies, on the other hand, are said to be offering more for the wheat to almost as much as Rs1,050 a quintal to farmers in Patiala district of Punjab.

Hence corporate buying may again dent, after last year, the purchase of wheat by the Food Corporation of India (FCI), which feeds the public distribution system for economically weaker sections of society and intervenes in the open market to stabilise prices.

In 2006-07, the FCI was able to procure only 9.2 million tonnes of wheat, against 14.8 million tonnes in 2005-06.

The corporation is targeting a procurement of 15 million tonnes this year (the crop output is expected to rise to 72.5 million tonnes from 69.5 million tonnes last year), but experts feel it could be an uphill task now.

ITC and Cargill have drawn up plans to buy large quantities of wheat this season, though the Australian Wheat Board has decided to stay out of Punjab and Haryana.

The companies said initially they will try and buy at the minimum support prices though later, it depends on the market.

Last year, ITC bought 600,000 tonnes of wheat to meet its requirement for flour and biscuits.

The competition from the private sector in the mandis has intensified because private companies are prepared to pick up the wheat from farmers'' doorsteps, saving them transport and storage costs.

Last year of the 8.12 million tonnes of wheat sold in Punjab through the mandis, private traders bought 1.17 million tonnes or 15 per cent and are known to have bought another 1 million tonne directly from farmers.

Leading farmer associations have also come out strongly in support of traders. In fact, All India Kisan Coordination Committee chief Bhupinder Singh Mann and Shetkari Sangathan leader and Member of Parliament Sharad Joshi asked farmers to boycott FCI for the first 45 days of procurement.