New Delhi, April 8: Grain prices, which have risen by 30 per cent over the past one year, are likely to move up further, spelling trouble for kitchen budgets.

The UPA government, which had planned to give wheat farmers a bonus of Rs 100 on top of a price of Rs 1,000 a quintal, may be forced to announce a far higher bonus.

The government’s buying rate sets the market trend and any increase could effectively raise domestic prices. Private trade has traditionally settled for prices higher than the government’s buying price for wheat and rice.

Wheat is now selling at Rs 1,325-1,550 a quintal in wholesale markets in Delhi. The prices could go up by Rs 200-300 a quintal once the government announces a bonus on wheat procurement.

“Punjab and Uttar Pradesh farmers are holding back grain from the mandis. Everybody knows global prices are double what the government is offering them. They will hold back till prices go up,” said Ajmer Singh Lakhwal, the chairman of the Punjab Mandi Board.

Agriculture ministry officials here said they were readying a fresh note for the cabinet and there “was every likelihood that we will offer higher grain prices”. The government is considering raising the bonus by another Rs 100 a quintal, the officials said.

India’s wheat output in 2008 will exceed the government’s estimate and cross 75 million tonnes despite heavy unseasonal rains, agriculture minister Sharad Pawar said here today. “We will cross 75 million tonnes this year,” he said.

But political parties with large farmer vote bases have been drumming up support for higher grain prices, often competing in quoting higher amounts.

While the ruling Congress wants around Rs 1,200-1,300 a quintal, Mahendra Singh Tikait’s Bharatiya Kisan Union is rooting for Rs 1,600 a quintal and the Akali Dal Rs 1,800 for new wheat that is now being reaped in the grain bowls of Punjab, Haryana and western Uttar Pradesh.

“Farmers have already suffered up to 5 per cent losses because of last week’s untimely showers. They would like to recoup the losses and make a small profit. I have been touring the mandis and know they are holding back,” Lakhwal said.

Grain prices have been rising on the back of short supplies of wheat and rice at home and rising global price cues.

Price stability has become a big concern for the government as a series of elections lies ahead. Political parties tend to believe that high prices lose votes for ruling governments. But low grain prices also lose farmer votes.

State-run agencies buy both wheat and rice to supply grain at subsidised prices through a chain of ration shops and to create a buffer to guard against sudden crises in food availability.

Politically, too, it is expedient to raise buying prices as it helps woo an influential section of the electorate — farmers — on whose vote the Congress is already banking by announcing a Rs 60,000-crore loan waiver package.

Wheat prices in the international market have gone up to $450 a tonne or more than Rs 2,000 a quintal.

The country ended its reliance on food imports in the 1970s on the back of the successful Green Revolution which turned north-western India into an irrigated grain basket for the rest of the nation.

But two years ago, the country imported wheat for the first time in six years following a significant drop in stocks. It was forced to import wheat last year, too, at embarrassingly higher prices after local supplies ran low.