Punjab likely to raise wheat support price to Rs3,800/40kg

LAHORE: Punjab might increase wheat support price to Rs3,800/40kg for procurement season-2023, a senior official said on Wednesday.

“We need to bring uniformity in wheat support price with a view to end distortion in the grain market. That is why a summary has been prepared to raise support price from Rs3,000/40kg to Rs3,800/40kg or Rs95/kg along with another option to further enhance it to Rs4,000/40kg,” said the official.

The final decision in this connection would be taken by the provincial cabinet, he added.

Upward revision in support price became inevitable for Punjab, following Sindh government’s decision to jack up the price of wheat to Rs4,000/40kg. A difference of Rs1,000 between Sindh and Punjab has been encouraging wheat smuggling from Punjab to Sindh. Last year, the price was uniform at Rs2,200/40kg in Punjab and Sindh, which kept the grain market stable.

However, after the Sindh Cabinet’s decision that the provincial government would procure wheat at Rs100/kg in 2023, the support price of wheat in Sindh increased by Rs1,800/49kg to Rs4,000/40kg. Farmers were happy with the Sindh government's decision as it would help them meet their agricultural input requirements. But such a jump in prices would hit the masses hard, especially those living in urban areas.

It should be mentioned that the cost of production plus profit for wheat cultivation in Punjab has been officially assessed at Rs2,965/40kg.

Keeping in view the cost of production for 2023 season, the then CM Punjab Ch Pervaiz Elahi decided in a meeting on September 14, 2022 to set wheat support price at Rs3,000/40kg. An increase in the support price ensures that farmers are fully compensated for their efforts, the CM had said.

Supporting the idea of increasing wheat support price to Rs4,000 from Rs3,000, an official observed that local farmers would be able to compete globally as they get a good price against their produce.

“We have assessed price estimates of the import and found that Rs4,000/40kg price would be regionally as well as globally competitive.” As far as consumers’ interest are concerned, the official said that the provincial government would manage the situation in a coordinated way so that deserving consumers face no price hike of wheat at any time.

For this purpose, targeted subsidy programme would be in place in order to offset inflationary pressure for vulnerable consumers, he concluded.

Nevertheless, the provincial government feels that attractive wheat support price would encourage wheat growers and make cultivation of this important food staple profitable. “With higher profit margin, we hope that the farmers bring their wheat crop to designated centres of Food Department from where they would be paid in cash,” the official said, adding “we hope wheat would largely be in safe hands instead of private buyers who used to sell it in the open market”. In the evolving situation, there would be minimal need to get support of the middleman or private buyers.