LAHORE: Farmers have been forced to sell wheat at less than the officially calculated cost of production as the provincial government is still not sure about launching procurement campaign despite making an announcement.
The Food Department, the biggest purchaser of wheat in the country, has failed to enter the market in line with its mandate of stabilising commodity price and procurement plan even after approximately 50 percent crop harvest in south Punjab. The absence of the provincial government in the wheat market at the harvest time means complete impunity for the powerful flour millers and middlemen to buy wheat at their sweet will.
Consequently, the price of wheat being purchased by the private sector, including flour mills, has dropped to as low as Rs2,800 per 40-kg against official rate of Rs3,900 per 40-kg, which is also lower than the cost of production calculated by the Agriculture Policy Institute, Ministry of National Food Security & Research, for the 2023-24 crop.
According to the official calculation of cost of production at market/procurement center level, farmers have to spend Rs3,304 on 40-kg grains. Many farmers have been left with no option but to sell their produce even at throwaway price of below Rs3,000 per 40-kg. With provincial government in deep slumber, farmers fear that price of wheat could nosedive to Rs2,000 per 40-kg in next couple of weeks.
The farmers’ organizations threatened if the government does not address the issue of low wheat prices, they will not cultivate wheat next year. The farmers leaders believe that the government has intentionally left farmers at the mercy of flour mafia.
Rao Afsar, a small-scale farmer hailing from Rajanpur, said the provincial Food Department did not even start distribution of gunny bags according to stipulated time. Such a criminal negligence has never been seen on the part of provincial government, he lamented. The government has not come up with any plan for start of procurement, which is adding to the anxiety of growers.
He recalled that at the time of sowing, wheat rates ranged between Rs4,500 to Rs5,000 per 40-kg. Input rates continue to spiral in the wheat plantation period as there was no reduction in the cost of cultivation. At the start of the season, urea bag rate was around Rs5,500 while it has gone up to Rs7,000 later. Similar is with the case of DAP, diesel, electricity and labour costs.
Mubashar Naeem, a grower residing in Layyah, decried that the middlemen, including private buyers and brokers, freely take advantage of farmers’ plight and make real profits by offering peanuts to hapless farmers. He asked the authorities to start wheat procurement without any delay and continue buying till stablising the market.
Meanwhile, the provincial government claimed that the credit line for procurement could not be secured, blaming the Centre for the delay. On the other hand, the federal government accused the provincial government of not timely submitting its procurement plan.
Federal Minister for National Food Security blamed the interim government for importing wheat against the plan, causing a glut in the market due to excessive wheat reserves. He said the import of wheat was carried out during the past government and continued till the maturity of new crop.
Market insiders claimed that federal and Punjab governments’ response to wheat procurement singled a disconnect and indifferent attitude towards the ground realities of grain market and issues related to people living in rural areas. Talking about the ‘excuse’ of Punjab government’s that Food Department already had carryover stock of about two million tons from previous crop and there was no space for storing new crop, insiders recalled that in 1999-2000, the then government procured over six million tons of wheat from the growers and stored most of the grains in rented and makeshift warehouses. Hence, Punjab can and should buy and store at least four million tons in the ongoing season in order to ensure fair price to farmers.
Commenting on lack of securing loans for government’s wheat operation, they claimed food sector circular debt has been at its lowest ebb and there should be no reason in getting new loans from the banks. If government really wants to intervene in the wheat market to stabilize grain rates, everything is possible and achievable, they emphesized.
Meanwhile, Bilal Yasin, provincial Food Minister accused interim government for importing wheat in excess, which caused glut in the market. He called it a blunder and criminal negligence on the part of caretaker set-up, which needs to be investigated.
He said on Friday that the Punjab chief minister was clear in her approach to rectify the situation and take pro-farmer steps. She issued directions that there should be no adverse impact on farmers during wheat season. “We are trying to get loans from banks and taking other necessary measures to buy around 1.5 to 2.0 million tons wheat.” He expressed the hope that decision in this connection would be taken on Saturday afternoon.