Monday June 17, 2024

Wheat growers in middleman trap as Sindh drags feet on procurement

By Shahid Shah
April 23, 2021

KARACHI: Majority of wheat growers in Sindh were forced to sell their harvests to middlemen at lower rates as the provincial government couldn’t begin procurement drive on time, it was learnt on Thursday.

Wheat grower Nisar Khaskheli told The News that usually procurement drive by Sindh Food Department stabilises prices in the market. However, this year only 30 percent growers have wheat with them while others had already sold it to middlemen or investors at lower rates than the support price of Rs2,000 per 40kg.

Compared to the federal government that was giving price of Rs1,800 per 40kg, the provincial government’s rate was higher. However, the growers sold their crop to investors at around Rs1,850 to Rs1,900, as the provincial government was again late in procurement, according to Khaskheli.

“This year, winter duration was short, but extreme cold and summer came early. Thus, crop went on harvesting earlier than last year,” he said. “We don’t have holding power. So, we sold it at Rs1,900 per 40 kg to the investors. This is upper Sindh situation. Lower Sindh sold it relatively earlier. They even sold out at Rs1,800 to Rs1,850. Now, only Larkana, Jacobabad and Kashmore districts are left. But their wheat goes to Balochistan and Afghanistan.”

Sindh Minister for Agriculture Ismail Rahu said the province had procured 120,000 tons of wheat by Sunday, April 18. Twelve procurement centers were established in Badin district, lower Sindh, Rahu said in a statement.

Growers argued that majority of the growers in lower Sindh, Badin, Sujawal and Thatta districts had already sold their crop to the investors and middlemen at lower rates.

In 2019, the provincial government did not procure wheat and the grain disappeared from the market. “In 2020, no just late procurement was started. They took away wheat from warehouses of the people forcefully,” he added.

Khaskheli said Sindh government would not be able to meet the target this year. They can purchase from Punjab’s districts, which are adjacent to Sindh at Rs1,900. The official rate there is Rs1,800. Benefit would be transferred to growers of the Punjab, he said.

Mehmood Nawaz, senior vice president of Sindh Abadgar Board concurred the procurement was late and slow at the time when harvesting was at its peak.

“Despite an increase in the support price, very little benefit has reached to the growers,” said Nawaz. “Wheat harvesting starts from beginning of March, but the procurement started on 6-7 April. By this time 40 to 50 percent wheat had gone away from the growers.”

Nawaz said wheat was sold at Rs1,800 to Rs1,900 per 40kg to the middlemen. Most of the growers sold wheat at Rs1,800 per 40-kg, Rs200 below the support price and difference reached to Rs7 billion for 1.4 million tons, which is the procurement target of the provincial government.

“No benefit of crop is being transferred to consumers who purchase wheat flour at Rs70 kg and above. We see that middleman is encouraged officially, so he gets the benefit. If he sells to the government, he gets benefit.

If he sells in the open market, he gets the benefit, as prices in the open market will be increased to Rs2,500 to Rs2,600 per 40kg after harvesting ends,” he said.

Overall, a crop of 4 million tons are expected in Sindh this year. If government procures 1.4 million tons, the remaining 2.6 million tons would be sold in the open market.

According to growers, by April 21, no more than 10 percent wheat was available with the growers.