Why was nobody prepared to welcome a bumper crop?

The Following research study on the General Situation of Crops and Plan Rehabilitation of Farmer IDPS from Conflict Zone of NWFP (Pukhtunkhwa) shared at Peshawar Press Club.

Wheat season 2008-09

Why was nobody prepared to welcome a bumper crop? 

Findings of a survey conducted in Punjab to assess wheat crop situation 

  • Area under wheat increased by around 10 percent; yield by 18 percent and the overall production by 30 percent 
  • Punjab is likely to have produced more than 20 million tons 
  • Estimate for the country is between 25 and 27 million tons
  • Tradable surplus is a variable and not a constant 30 percent as used by the government 
  • A conservative estimate puts the Punjab tradable surplus for the current season at 10 million tons 
  • Government departments procured wheat from 9 percent of the wheat producers in 2007-08 
  • 85 percent of the government procurement in past season came from farmers with more than 25 acres of land

The government departments are behaving as if struck by an unforeseeable emergency. The wheat crop is bumper, in fact all-times-high. But wheat is sown in October and November and the crop ripens in over five month’s time. Everyone should have known the situation much in advance. The high officials with all the resources of State at their disposal are best placed to estimate and predict and plan accordingly. Why didn’t they do all that was necessary? 

Wheat is not just another crop. It is a matter of survival for the masses of this agricultural country. However the crop could never attract the attention of the policy makers and the implementers that it deserves. Most of the policy decisions and actions are based on the myths, estimates and flimsy information. There is currently no evidence based system in place to plan the cultivation and for managing the marketing of wheat in Pakistan. 

To test some of the estimates and myths, Punjab Lok Sujag and South Asia Partnership Pakistan (SAP-PK) jointly planned a Punjab wide survey at the onset of current harvesting season and conducted it with the participation of 11 other district based organizations. This survey has focussed on three major aspects of the crop: the quantum of produce, its division among different partners and the trade. Data was collected from 956 wheat growers in 168 villages of 14 districts in Punjab. This cluster of districts produces around half of the wheat in Punjab. The data was collected during the second half of April 2009. It was refined and validated before analysis.  

The survey results put the average rise in production of wheat this season at 30.6 percent of the past season. If the 2007-08 wheat production of Punjab (15.6 million tones) is projected at the same ratio, the 2008-09 wheat output amounts to a massive 20.4 million tones. Even if the production in other three provinces is considered static, the country’s overall production is likely to have become 25.7 million tones, much higher than all the guesses and estimates made by the government and/or experts till date. 

The government had raised the wheat Support Price by an unprecedented 46 percent for the current season (from Rs 650 to 950 per 40 kg) and the farmers have responded with a befitting reply. The survey shows that the wheat production rose to a high level as an accumulated impact of rise in both the area under wheat and per acre yield. The inspired farmers increased area under wheat by 9.8 percent of the past season while per acre yield also rose by 19 percent. The table below gives a picture of the increase in area and production of wheat in the 14 surveyed districts. 

 

 

 

2007-08

2008-09

     
 

District

No of farmers

Total land under wheat Production Yield Total land under wheat Production Yield Rise in area Rise in yield Rise in prod.
      acres Maunds 40kg/acr acres Maunds 40kg/acr % % %

1

Attock

70

498

         9,110      18.3

507

       11,927      23.5    1.8   28.6  30.9

2

Bahawal-nagar

77

743

       23,163      31.2

772

       27,787      36.0    4.0   15.4  20.0

3

Hafizabad

77

1601

       59,413      37.1

1686

       69,117      41.0    5.3   10.5  16.3

4

Jhang

66

525

       15,799      30.1

555

       17,011      30.7    5.8    1.8    7.7

5

Layyah

52

530

       16,017      30.2

552

       18,728      33.9    4.1   12.4  16.9

6

Lodhran

80

1224

       36,700      30.0

1328

       57,833      43.5    8.5   45.2  57.6

7

Mianwali                 

80

1659

       47,423      28.6

1896

       61,200      32.3  14.3   12.9  29.1

8

Narowal

76

690

       19,332      28.0

659

       15,195      23.1 –  4.5 – 17.7 -21.4

9

Okara

66

1815

       72,471      39.9

2328

      110,620

     47.5  28.3   19.0  52.6

10

Qasur

66

868

       28,912      33.3

933

       37,637      40.3    7.5   21.1  30.2

11

RY Khan

77

1223

       40,245      32.9

1332

       53,169      39.9    9.0   21.3  32.1

12

Sahiwal

44

391

       14,685      37.5

426

       19,141      45.0    8.8   19.8  30.3

13

T.T.Singh

70

610

       22,514      36.9

594

       27,559      46.4 –  2.6   25.7  22.4

14

Vehari

55

1178

       39,102      33.2

1312

       54,115      41.3  11.4   24.3  38.4
                                           
  Total

956

    13,553       444,884      32.8     14,879       581,037      39.0    9.8   19.0  30.6

 

Only two of the survey districts, Narowal and Toba Tek Singh, showed a negative trend as area under wheat reduced here. Narowal also had to face a decline in yield as weather in the area has not been favorable resulting in an overall decline in production. Toba however compensated the reduction in the area by better yield to produce more wheat than the previous year.

In contrast many other districts have thrived on the back of high yield alone. Attock increased area under wheat by only 1.8 percent, yet a high increase of 28 percent in yield resulted in increased production. Lodhran surpassed all other districts in rise in yield as the per acre wheat production in the district rose by a hefty 57.6 percent. Rise in wheat production in Okara was mainly contributed by a big increase in area under wheat. Okara and adjoining areas are the hub of potato production that failed to fetch a good price in the previous seasons. This coupled with the ensured high price for wheat wooed a number of farmers to replace potato with wheat. An additional rise in yield resulted in the big increase of 52 percent in wheat production in Okara. 

The following table shows that wheat yield increased for all farmers during the current season. 

  Percentage increase between 2007-08 and 2008-09 in
  Area under wheat Per acre yield Production
Very small farmers (under 2.5 acres) 28.7 25.2 61.5
Small farmers(2.5 to 12.5 acres) -1.8 14.1 12.0
Medium farmers (12.5 to 50 acres) 16.4 17.9 37.2
Large farmers (Over 50 acres) 7.9 21.2 30.7

Favorable weather and the big incentive offered by the government inspired and helped farmers to give a bumper crop and make the country brimming with its staple food for the first time in history. But this increased produce, unfortunately, seems to be turning into catastrophe for the farmers. Today, the farmers of Punjab have over 10 million tons of wheat available for sale but their biggest buyer, the government, has displayed nothing that could prove, or at least indicate, its ability to handle such a huge asset. Although the targets for the government’s procurement departments have been raised, much of the rhetoric is to serve the political objectives than the interests of the farmers. 

The Punjab Food Department had raised its target from 3.5 to 4 to 6 million tons while the federal government’s PASSCO has increased its to 2 million ton to be met from all over the country. Besides having a poor track record of achieving its much lower targets than these, the targets fixed this time are still a quarter less than the actual quantities of the crop available for trade.

The government experts have been calculating the tradable surplus in wheat as 30 percent of the total production. (The surplus is the quantity the farmers offer for sale after saving for home and sharing with others.) The procurement agencies use this figure to set their targets which helps stabilize the market at the government announced Support Price. 

The 30 percent thumb rule is flawed. We are clueless about how did the government experts arrive at it. The tradable surplus is not a constant. The results of our survey shows that not only the tradable surplus is much higher than the government calculations, it varies from season to season. 

The wheat crop is divided into many parts. These include the portions given to the harvesters, share croppers (Saipees), relatives, land owners (in case of rented or leased land), in charity and the amount that is kept for domestic consumption or as seed for the next crop. Crop reapers are paid in maunds (40 kg) of wheat per acre while threshers are paid a percentage of wheat produced. Share croppers get a fixed weight from each farming family. Quantity saved for home consumption depends upon number of persons in the family and remains constant whatever the production. The table gives a breakdown of the percentage shares of various parties in the current and the previous season. 

  Share – as % of total production
2007-08 2008-09
Saved for home consumption 12.9 10.3
Offered to relatives (for free) 1.1 0.4
Given to land owner (in case farmer has leased land from someone on batai basis) 1.7 0.1
Saved as seed for next crop 3.9 3.9
Harvesters – includes reapers, packers, thresher, cleaners 12.6 9.5
Share croppers (saipee) – like barber, potter and others 2.2 2.4
Charity – includes usher, mosque, imam and others 1.5 1.5
Sold in market 64.0 72.0
Number of interviews 956 229

The percentage shares are also not the same for all farm sizes. Small farmers produce just enough for family consumption so they have little or none to offer to the market. The tradable surplus naturally increases with the farm size. The survey shows that farmers with less than one acre of land sell no wheat while those with 1 to 2.5 acre of land sell just 14 percent of their production. In contrast farmers owning more than 50 acres of land sell 74 percent of their production. 

  Farm size  Home consumption + relatives Other shares  Sold in market

 As percent of total production

Less than 1

81.9

18.1

0.00

1.0 to 2.5

64.8

21.7

13.48

2.5 to 5.0

46.4

22.5

31.19

5.0 to 7.5

32.6

26.8

40.58

7.5 to 12.5

26.3

26.7

47.02

12.5 to 25

18.6

25.5

55.91

25.0 to 50.0

13.3

22.5

64.18

50.0 to 100.0

9.1

18.5

72.44

100.0 to 150

7.0

21.0

72.03

150 or above

3.3

18.9

77.77

Saip or crop sharing is an old tradition in Punjab whereby various service providers are paid an amount in kind (weight in wheat) against their year long services by the farmers who grow this staple food. Times have, of course, changed and many saipee have fallen out of favor of the producers. The following table shows that how many farmers still pay whom in kind. 

 Saipee  No of farmers that paid them  % of farmers that paid them
Barber 748 78.2
Blacksmith 536 56.1
Carpenter 342 35.8
Potter 258 27.0
Cobbler 139 14.5
Mirasi 135 14.1
Servants 117 12.2
Watchman 87 9.1
Maachhee 59 6.2
Mason 59 6.2

The quantity that is left after everyone has picked his/her share is offered for sale by the farmers. The 956 surveyed farmers sold 64 percent of their total produce in 2007-08 and the ratio is likely to increase up-to 72 percent this time.

Since the survey sample does not represent all the farm sizes in exactly the same proportion as presented in Agriculture Census 2000, we have used the weighted average method to calculate the tradable surplus for the current crop. A very conservative estimate puts the tradable surplus at 48.7 percent of the total production or 9.6 million tons for the current season. The table given below shows the quantities of wheat available for sale this season, with different categories of farmers. 

                                    No. of farmers      Wheat available for procurement

Farm size                      (millions)                 (million tons)

Below 2.5 acres           1.32                       0.23

2.5 to 12.5 acres          1.98                       3.36

12.5 to 50 acres           0.52                       4.49

Over 50 acres              0.05                       1.54

All                               3.87                       9.62                      

The survey results have shown that middleman is the biggest buyer of wheat as three fourth of the farmers, sold their surplus to them in 2007-08. 14 percent sold the surplus to local retail market and a nominal percentage sold it to the flour mills and seed companies. Government procured wheat from only 9.3 percent. The quantity purchased by the government departments was only 10.5 percent of the total wheat produced or 17.9 percent of that traded in 2007-08. Following table gives details: 

 Sold to No. of farmers

As % of total

Government departments

77

                         9.3

Middlemen

617

                       74.6

Local market

117

                       14.1

Seed companies

5

                         0.6

Flour mills

11

                         1.3

Total who sold

827

                     100.0

 And this is not it. The government departments purchased wheat from the large farmers who make the top 9% of the farming community. Their average farm size is more than 33 acres and the quantity they have to sell averages at 585 maunds.

A comparison of the data for different categories of the farmers, obtained through the survey is given in the table below. 

 

No. of farmers that sold wheat to

Percentage of farmers that sold wheat to

  Govt deptt. Private buyers Govt deptt. Private buyers
         
Less than 1 Acres

0

0

0

0

1-2.5 Acres

0

12

                          –                        100.0
Very Small farmers

0

12

                          –                        100.0
         
2.5-5.0 Acres

1

64

1.5 98.5
5.0-7.5 Acres

4

115

3.4 96.6
7.5-12.5 Acres

13

152

7.9 92.1
Small farmers

18

331

5.2 94.8
         
12.5-25.0 Acres

21

181

10.4 89.6
25-50 Acres

20

140

12.5 87.5
Medium farmers

41

321

11.3 88.7
         
50-100 Acres

13

61

17.6 82.4
100-150 Acres

3

15

16.7 83.3
Above 150 Acres

2

9

18.2 81.8
Big farmers

18

85

17.5 82.5
         
Total

77

749

9.3 90.7

Wheat growers are divided into four categories based on the size of farm they till. No farmer in the very small category was able to reach any of the government departments for selling its surplus produce. All of those sold it to private buyers. The ratio of those who are able to do business with the government increases with the farm size and reaches its maximum for those who possess a farm of 50 acres or more. 

The following table gives the percentage share of various farmers in the total quantity purchased by the government departments. It shows that over half of the government targets are met through procurement from big farmers. In fact 84 percent of the government procurement comes from the farmers that have more than 25 acres of land.  

Share of different farmers in government procured wheat

SAP-Sujag survey for 2007-08 wheat crop

 

 

 

  No. of farmers Percent share
Less than 1 Acres

0

0

1-2.5 Acres

0

0

Very Small farmers

0

0

   

 

2.5-5.0 Acres

1

0.2

5.0-7.5 Acres

4

0.3

7.5-12.5 Acres

13

5.5

Small farmers

18

6.0

   

 

12.5-25.0 Acres

21

9.9

25-50 Acres

20

29.8

Medium farmers

41

39.7

   

 

50-100 Acres

13

30.7

100-150 Acres

3

23.6

Above 150 Acres

2

 

Big farmers

18

54.3

   

 

Total

77

100.0

This provides ample evidence that the government departments fail to reach the small farmers. If the departments are offering a price higher than the private sector, as is the case of the current season, it becomes an advantage for the farmers to able to sell it to them. The advantage is easily transformed into a political favor in our specific governance context. The favors are offered to those who matter. Do the small farmers matter?

 

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