Sindh, Passco wheat fiasco puts grain sector regulation at stake

LAHORE: Sindh Food Department and Pakistan Agricultural Storage & Services Corporation (PASSCO) have failed to meet wheat procurement target, straining the ability of public sector entities to effectively regulate grain sector, The News has learnt.

Surprisingly, Sindh Food Department has yet not officially ended wheat procurement drive despite the fact that harvesting of this year’s grain crops has been completed about four months back. Out of 1.4 million tons, Sindh Food Department has hardly been able to procure less than 1.2 million tons.

Market insiders are wondering how procurement of wheat is still going on in Sindh province as preparation for sowing of new crop is barely a couple of months away. It seems Sindh Food Department is only giving benefit to middlemen as whatever wheat is being procured at Rs2,000/40kg, in fact was bought from farmers at Rs1,700/40 kg or so, they regretted.

The authorities in the Sindh government for the first time differed from the uniform procurement pricing mechanism as the provincial government this year fixed wheat procurement price at Rs2,000/40 kg, which was Rs200 higher than the price announced for rest of the country, including federal government and Punjab Food Department.

The failure of Sindh Food Department has been colossal in the sense that they could not procure a modest wheat procurement target of 1.4 million tons despite having a much higher procurement price from the rest of the country.

The wheat procurement campaign of PASSCO, a federal government enterprise, depicts almost similar deplorable state of affairs. Out of 1.2 million tons target, PASSCO could only manage to purchase around 0.9 million tons of grain. The biggest wheat procurment failure by PASSCO has been in the province of Sindh. The PASSCO management argued the wheat price being offered by Sindh Food Department was higher than what they have been recommending, terming it a main factor in their failure to purchase grain as per required. However, market insiders blamed callous attitude of PASSCO management for their failure in meeting even a revised procurement target. Earlier, PASSCO had been asked to buy 1.8 million tons of wheat.

The PASSO in fact started wheat procurement much late in Sindh province, claimed market insiders. The wheat was matured by mid of March in Sindh and then new crop started arriving in the market but PASSO unfortunately was not in the market to purchase the bulk of commodity, which was then available at around Rs1,800/40 kg.

It is sheer mismanagement on the part of PASSCO that it actually started buying around by mid of April, making it difficult to compete with other competitors by then. Previously, PASSCO used to buy much more wheat than what it had succeeded in procuring this year, lamented market insiders.

They said had both these public sector entities been able to buy a million tons more wheat than what they have Pakistan could have saved billions of rupees spent on wheat import.

Moreover, they added, wheat price could have been lowered in the country due to leverage of greater stocks with the public sector. It may be noted the federal government in March 2021 had fixed 1.8 million tons wheat procurement target for Passco, 4.5 million tons for Punjab, 1.4 million tons for Sindh, 1 million tons for Balochistan and 0.45 million tons for Kyhbyer Pakhtunkhwa.