NEW DELHI (Dow Jones)--India is considering a further increase in the intervention price for rice to accelerate government procurement of the commodity, Finance Minister P. Chidambaram said Monday. 
The government procures rice from farmers to run subsidized sale programs at set intervention prices. It has already increased the intervention price twice for the current marketing year that started Oct. 1.

"The cabinet will discuss a proposal to increase the minimum support price (intervention price) for rice soon. It will come up at the next meeting or the one after that, depending on when the prime minister wants to take it up," Chidambaram told reporters. 
 
To give a boost to local purchases, the government raised the intervention price in October at which rice is purchased from farmers by INR500 a metric ton, in addition to an INR650/ton increase that had already been provided. 
 
Recently, lawmakers from India's main rice-producing provinces, namely West Bengal, Andhra Pradesh, Tamil Nadu and Karnataka, met the federal agricultural and finance ministers to seek a higher market intervention price to encourage farmers to plant more rice in the coming years.  
 
"(The) Government procurement program would not succeed if it does not bring the intervention price of rice at par with wheat," a lawmaker present at the meeting said. 
 
India's state-run agencies have so far purchased 8.08 million metric tons of rice from farmers, down 5.5% on year, the latest government data show.  
 
The government purchases rice from farmers at state-set intervention prices to run its subsidized rice sale programs. 
 
India's rice marketing year starts in October and ends in September. Last month, India raised the intervention price of wheat by INR1,500 a metric ton to INR10,000 a ton. 
 
"This sharp increase in wheat's intervention price is acting against the interest of rice growers," a market observer said.