Iran Nears Decision on Guaranteed Wheat Price as 80,000-85,000 Toman Range Emerges
Iran is approaching a decision on its guaranteed wheat purchase price for the 1405-1406 crop year, with proposals ranging from 80,000 to 85,000 tomans per kilogram. The choice will affect planting incentives, state procurement costs and subsidies across the flour-to-bread chain.
No final procurement price yet
Iran’s guaranteed wheat purchase price for the 1405-1406 crop year has entered the final stage of deliberations, but no binding rate has yet been approved or announced. According to Vana News, the specialist committee of the Pricing Council completed its technical review on 29 Shahrivar. That review is not equivalent to a final resolution by the council.
The Agriculture Committee of parliament examined the wheat, flour and bread chain at its Monday meeting. Committee spokesman Houshang Hadianpour said one member had been assigned to follow the relevant meetings every week. The committee wants the system reviewed as a single chain, including farm production, state wheat purchasing, flour supply, bakery costs and household bread prices.
The National Wheat Farmers Foundation has said the new guaranteed price should be no lower than 80,000 tomans per kilogram. This is an industry demand, not an approved government rate. Reports from technical discussions indicate that some Pricing Council members consider 85,000 tomans reasonable after reviewing production costs and inflation. The council could still choose another base price or link part of the payment to quality or delivery incentives.
A rise of as much as 75%
For the 1404-1405 crop year, the average guaranteed purchase price was about 48,500 tomans per kilogram, while the ceiling for some quality grades reached approximately 49,500 tomans. A new rate of 80,000 tomans would represent an increase of about 65% from the previous average. At 85,000 tomans, the increase would be approximately 75%.
Farmers argue that higher seed, fertilizer, machinery, labor, water, fuel and other input expenses require a substantial adjustment. If the guaranteed rate remains below actual production costs, growers may reduce planted area or sell wheat through unofficial channels. That would weaken state procurement and could raise the need for imports, although no import forecast has been announced.
The government faces a much larger financing requirement at either proposed rate. Around 8.5 million tonnes of wheat had been purchased from farmers by the end of the first week of Shahrivar, with claims valued at nearly 420 trillion tomans. A deputy agriculture minister said most of that amount had been paid by early Mehr and that the government planned to settle the balance by the end of Mehr.
The scale makes even a relatively small price difference significant. An additional 10,000 tomans per kilogram applied to 8 million tonnes would add roughly 80 trillion tomans to procurement costs. The Agriculture Ministry says the pricing formula considers production costs plus a normal profit, global prices including associated expenses, inflation and other market and production variables.
Flour subsidies and bread prices in focus
A higher wheat purchase price does not automatically produce an immediate equivalent increase in retail bread prices. Much of the wheat used by subsidized bakeries reaches mills and bakeries through state support mechanisms. The government can therefore absorb part of the higher grain cost through flour subsidies, but the required subsidy grows as the gap widens between wheat’s economic value and the price charged for bakery flour.
Parliament’s Agriculture Committee said bread prices should not place additional pressure on household finances, while also calling for reform beyond bakeries themselves. Policymakers must preserve farmers’ incentive to plant, allow bakeries to cover their costs and limit price increases for consumers. Responsibilities among agencies also remain an issue: the Agriculture Ministry has previously said its mandate extends through flour supply, while broader bread policy involves other government bodies.
The Agriculture Ministry had sought to finalize the rate by the end of Shahrivar, but that deadline passed. Discussions have expanded to non-price support, participation by agricultural organizations and the private sector in purchasing, and input from working groups at the agriculture and industry ministries. Until the Pricing Council publishes its official resolution, 80,000 and 85,000 tomans remain proposals rather than confirmed prices.
