Archive for December, 2010

Constraints on wheat production

Post Source: Dawn Economic and Business Review

By Dr Muhammad Tahir and Muhammad Rashad Javeed

GIVEN the country`s rich natural resources, it is imperative to fully realise the biological potential of our major field crops, particularly wheat. In Punjab, more than 50 per cent of the total planted area every year is under wheat cultivation, showing the socio-economic importance of the crop for farmers and their contribution to its yield. The climate here is conducive to growth and production of wheat, having high-yielding varieties, ample resources, fertile land and hard working farmers. But the growers fail to achieve the optimum potential of wheat crop. There are many constraints in raising wheat.

Quality seed is a basic requirement to sustain any crop. Target yield of the crop depends on availability of quality seeds of improved varieties as effectiveness of agricultural inputs depends on seed potential.

The Punjab Seed Corporation provides only 10 per cent certified seed to the farming community. The shortage of quality seed can be met by encouraging more private companies having good repute, strengthening the private-public relationship, increasing capacity of the Punjab Seed Corporation and provision of technical assistance for production of quality seeds.

A crop sown in time ensures better yield than the delayed one, because late sown crop fails to complete its physiological processes, remains under stress and fails to demonstrate its full potential.

Noteworthy point is that only ± 20 per cent crop is planted before November 15, the optimum planting time, and 80 per cent is planted late every year. There is a considerable decrease in yield because of delayed sowing (One per cent per day i.e. 10-15 kg per day per hectare).

Normally delayed planting of wheat takes place in cotton belts (44.9 per cent) and rice track (21.3 per cent) which can be overcome by zero-tillage drill, turbo-seeder, late sowing varieties of wheat, early sowing varieties of cotton, sowing of wheat in standing sticks of cotton crop and using less time for land preparation. These practices enable farmers to save time, but still are not very effective in increasing yield.

Plant population per unit area is never considered to be an issue in wheat fields although it directly has a role in total productivity. Poor quality seed results in poor germination and less number of plant population per unit area. Plant population can be optimised by sowing recommended seed at a proper depth in line with a drill before November 15.

Water is involved in all chemical activities within the plant body, transporting raw materials and minerals from soil to the chemical reaction site. Experiments show that critical growth stages of wheat towards irrigation are crown growth initiation, tillering, booting and grain filling (milking) stages.

Shortage of water during these critical stages disturb the physiological, chemical and enzymatic function within the crop which cannot be overcome later, even giving ample water supply to wheat plant.

Sprinkler irrigation, sowing of wheat on beds, mulching, lining of water courses, leveling of land by laser, de-silting of canal and water courses, application of water in critical stages and introduction of drought resistant varieties are helpful in coping with this problem of poor yield.

Due to growing of continuous and exhaustive crops, the nutrients uptake is more than natural replenishment of the soil up to the required nutrient level, which seriously needs an artificial/synthetic addition to sustain wheat crop yield. In our country, consumption is more than production, which causes a severe hindrance in yield improvement programme.

The government should provide all inputs especially good quality seed and fertilisers at farmers door step before the wheat season starts. The government can manage and overcome these problems by controlling hoarding, enhancing capacity of already working fertiliser units, importing fertilisers in case of deficiency, increasing soil testing laboratories up to union council level, controlling price at the recommended level, preventing adulteration of seed and fertilisers and giving technical assistance to farmers on fertiliser management practices, to increase fertiliser use efficiency and increase yield.

Weeds reduce crop yield and are more beneficiaries of resources than the crop plants. Weeds reduce yield by 12-35 per cent by competing with crop for nutrients, space, and sunlight.

The problem can be overcome by crop rotation, use of clean seed, sprinkler irrigation, planting of wheat on beds, clean cultivation, optimum planting geometry and controlling of weeds on field bunds and water courses.

No doubt, we have enough natural resources and hardworking farmers, but there is lack of planning and management on both government and farmers sides. The government should promote co-operative farming, strengthen co-ordination among the three vital pillars of agriculture departments i.e. research, extension and farmers, and educate the farmers with new agricultural technologies to increase wheat yield.

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PKM accuses Sindh sugar mills of fleecing poor farmers

Post Source: PAKISSAN.COM

 

Pakistan Kissan Movement (PKM) Secretary General Hanif Gujjar has claimed that the sugar industry in Sindh is fleecing poor farmers by arbitrarily reducing the sugarcane prices from Rs 67 per 40-kg to Rs 60 and now have reduced the prices to Rs 55 per 40-kg. After a tour of Sindh PKM leader in a statement here Monday said that the farmers’ organisations in Sindh have asked the farmers to stop harvesting sugarcane in Sindh and not to supply sugarcane to sugar mills at Rs 55/-per 40-kg.

He said the farmers in Sindh were so angry that they were planning to bring their cane trolleys on the roads and set the sugarcane on fire. “They are so furious and have even decided to block the roads leading to Sindh sugar mills. The situation in Sindh is deteriorating and getting out of control,” he warned.

Gujjar said, “We have never seen such humiliating attitude of the Sindh sugar mills towards sugarcane growers, who are bent upon sucking the blood of the poor farmers.

Wheat losing edge over cotton, cane crops

Post Source: Dawn Economic and Business Review

By Ahmad Fraz Khan

THE wheat crop has started losing comparative price advantage vis-à-vis sugarcane and cotton and is expected to lose a chunk this season. As a first sign, sowing is falling behind the schedule. By mid-December, one month after the deadline, the province is still struggling with its target of 16.89 million acres, being short of one million acres. As per official claims, farmers are still sowing the crop and might achieve the target by the first week of January. But the sharp decline in temperature, falling close to zero degrees Celsius in most parts of the province, will make germination of the seed almost impossible for new sowing from here on. The farmers would hardly take the risk.

The pattern of sowing reflects how wheat is losing the competitive edge against cane and cotton. Over 90 per cent of sowing deficit has come from the traditional cotton belt – areas falling between Multan and Rahimyar Khan. The rest has come from the cane area. It is largely because of lucrative cotton prices, which touched whopping Rs10,000 per maund before dropping by 10 per cent to hover over Rs9,000 per maund. The cotton prices are riding high because of drop in international and domestic production and export curbs imposed by big players like India. Of late, India has emerged as a big cotton exporter. Every time it squeezes supplies, huge demand from China drives the price up.

International cotton prices have risen steeply since the beginning of this season. Average price over first four months of the season remained 120 cents per pound, almost twice as high as the average over the corresponding period last year.

In Pakistan, where cotton production fell around three million bales short of its milling requirement, the prices spike was even sharp.

The farmers in the cotton belt are thus waiting for the last possible picking, rather than vacating the fields for wheat. They are doing so with a justification – if they can squeeze two maunds of cotton, they would get over Rs18,000 for just waiting instead of sowing wheat.

The cane prices have shot up because of its current shortage. The official indicative price stands irrelevant. The farmers are demanding as high as Rs300 per maund, if the millers are to be believed, and are keeping the supplies squeezed. The millers are only themselves to be blamed for the situation.

They have convinced farmers and consumers during the last few years that there was no link between the cane cost and sugar price. No matter at what price farmers provide cane, the millers would set the sugar price and multiply their profits.

Each year for the last few years, the farmers have repented selling cane at cheaper rate when the millers subsequently made billions of rupees by manipulating the sugar market.

This year, the farmers want their pound of flesh. They have increased the price to whatever limit they possibly can bargain for, and also refused to harvest crop till they get price of their choice. They are even risking next sowing to ensure maximum profits on this season`s cane. In the struggle, wheat sowing has become causality.

Wheat loosing its financial sheen reflects the fact that market forces are now determining the cropping pattern. But, one should not lose the context in which these changes are taking place.

Unfortunately, they are happening for wrong reasons. One of the reasons is the cartelization of agriculture trade, where traders and manufacturers are making billions of rupees at the cost of farmers and consumers. The farmers are responding to the phenomenon by forming their own cartels – as proven by cane supply and price. Moreover, the traditional agriculture set-up is collapsing in Punjab and farmers are trying to fill the gap by taking charge of the cropping pattern.

The provincial government needs to realise that it cannot allow cartelization of agriculture and its trade. It first ignored the sugar millers who fleeced the common man and is now allowing farmers to form cartels. It needs to act now to check these undesirable trends from striking deeper roots in the market and making corrections all the more difficult.

Coordination between the provincial and district governments also needs to be strengthened to enforce centralised policy guidelines for development of agriculture.

The employees, working under the district administrative set-up, have ceased to be professionals and become a “work force at the disposal of the DCOs concerned.” These DCOs regularly engage them in other provincial initiatives – “sasti roti (low priced bread), green channels, provision of sugar and even price magistracy. Expert advice, and central planning, has thus stopped reaching farmers, who are now on their own.

Luckily, growers` choice – sacrificing wheat at the altar of cotton and cane – suits the Punjab government this time. However, their next choice might not be different. It is time for the provincial government to think where it wants to take agriculture and how it plans to deal with it in future.

Belated decision on wheat export

Post Source: Dawn Economic and Business Review

By Ahmad Fraz Khan

AFTER months of foot dragging on the issue, the federal government finally this week allowed export of one million tons of wheat and its products. But considering international market trends, the decision seems to have come at least three months late. No one is now sure whether the country can benefit from the decision. Even if it does, there is no scope for exports to touch the mythical figure of one million tons. Over the last few months, the Punjab government wrote to the federal government time and again for permission to export wheat. First, it wanted the private sector to export. But, later, as financial desperation mounted, Punjab wanted to export the commodity itself, and clear the massive stocks. The federation, however, kept denying permission.

Punjab wanted to grab an opportunity created in the world market during August this year, when the Russian crop had failed and the world prices peaked to $400 per ton. Traditionally, August and September are considered to be lean months in the world market for availability of wheat.

The federal government, for purely political and Punjab-specific reasons, withheld the permission. It knew that Punjab finances would collapse if it does not clear its stocks. The province has been paying Rs80 million a day – Rs2.5 billion a month, and Rs30 billion a year – to service wheat related Rs180 billion loans. The federal-provincial politics thus not only ruined Punjab finance to a greater extent but an opportunity was lost to earn foreign exchange and develop a niche in the international market.

The international window, which opened in August, remained ajar till the beginning of the current month, as rains delayed harvest of Australian wheat – second largest crop in the world. Once the Australian crop hits the world market, international price is bound to slide and make export of dearer Pakistani wheat more difficult.

It was not only Russian crop failure, but a slight speculative pressure on wheat also helped drive prices up. Concerns about the next US winter crop, tightening the EU export supplies and mixed harvest results in Australia kept the prices high for a little longer than expected. These factors were in addition to world wheat production forecast of 644 million tons – five per cent less than last year. All these factors put together created an opportunity for Pakistan and Punjab having biggest ever stocks.

This week, wheat prices have come down to $324 and would go further below during the next two weeks when the Australian Wheat Board starts displaying its crop size and spot rates. The current rate of $324 per ton, translates into Rs27,500 per ton in domestic market. The official release price of little more than Rs25,000 leaves margin of over Rs2,000 per ton. But, the exporters have to get the wheat graded for export, which takes away 10 to 12 per cent of wheat. If transportation charges from Punjab are added, it does not leave any profit margin for exporters.

Thus, at the present international price, which might not hold for more than two weeks, exports from Karachi might make little sense. Exports from Punjab certainly do not make financial sense, from where Rs300 per ton transportation charges are added.

Apart from federal-provincial politics, the federal government must realise that exceptionally high domestic price of wheat has created a situation, where it would continue having surplus to varying degrees as long as it does not either rationalise domestic price or subsidise export. With current high domestic price and other incidentals charges added to it, export, would not make sense.

Pakistan, particularly Punjab, needs to take a long-term view of the crop – its future, export potential and possible markets. All big wheat exporting countries have created permanent institutions, like the Australian Wheat Board, to look after wheat exports.

It is such institutions that continuously monitor wheat prospects throughout the world, deal in future buying of the crop and provide foreign buyers a platform to deal with producers and exporters.

The need to create such institutions is underscored by three factors i.e. high domestic prices, massive and ever-increasing stocks and domestic production, which, on an average, has gone up by around two million tons during the last four years. Thus, it is time for the federal and the Punjab governments to sit together and create a permanent arrangement for dealing with the crop on commercial lines.

How to stabilise wheat price

Post Source: Dawn Business and Economic Review

 

By Khalid Mushtaq

WHEAT holds a central position in the country`s food economy, both in terms of production and consumption. Being staple food grain, wheat supplies 72 per cent of calories and protein in the average diet. Its share in the total cropped area is about 37 per cent and in value-added agriculture 12.7 per cent, with a share in the country`s GDP of 2.6 per cent. Punjab contributes 80 per cent of the total production of wheat and 75 per cent of the total area. Since independence successive governments have intervened heavily in wheat markets. On production side, support prices were aimed at increasing wheat output and to support farmers` income. On consumption side, subsidised sale of wheat/flour to flour mills/consumers was aimed at enhancing household food security and maintaining price stability.

On trade side, public sector procurement and distribution was the main policy thrust. However, these policy interventions have resulted in misallocation of productive resources, caused financial burden on public exchequer, distorted markets and discouraged private sector involvement in wheat trade.

The provincial and federal governments are concerned with minimising fiscal subsidies and overall food inflation and donors are also pressing government for reduction in food subsidies and an increased role of private sector in wheat marketing.

It is imperative to undertake a study to help the government in designing a strategy that could result in reducing intervention costs, stabilise wheat markets, ensure stable and just prices both for growers and consumers, provide risk-less profit opportunities to wheat traders and encourage private sector investment in wheat marketing.

A well integrated market system is the key to all these issues. If markets are well integrated, government can stabilise price of the commodity in one key market and rely on commercialisation to produce the similar outcome in other markets, thus reducing the cost of stabilisation considerably. Moreover with market integration, price signals and information`s are fully transmitted among markets and to the growers. Primary wholesale agricultural commodity markets (mandies) are well developed in Punjab.

An empirical analysis was conducted to check the level of price transmission among six major wheat markets i.e., Lahore, Faisalabad, Multan, Sargodha, Gujranwala and Rawalpindi using monthly nominal wholesale wheat price (Rs/100 kg) data from January 2000 to February 2005.

The results indicated that regional wheat markets in Punjab are well integrated and converge to long run equilibrium in the sense that most of wheat exchange locations are in the same economic market and Lahore was found to be the dominant market. It was also revealed that price formation in one market is being guided by the other markets. It means that if there is surplus in one market and deficit in the other, commodity moves from the surplus to the deficit market and the only difference is of the transaction cost.

Further, it was also revealed that if there is disequilibrium among markets, nearly 70-80 per cent of this is removed in the same period i.e., one month time span. It was also observed that price shocks are positively transmitted across the markets.

From a policy-making perspective, the high degree of market integration observed in this case leaves little justification for government intervention in wheat markets of Punjab. In fact, most of the parasitical organisations suffer from gross inefficiencies, with immense costs to producers, consumers, environment and the government exchequer.

In order to save these costs and to promote the cause of privatisation, the government would be well advised to desist from active and direct engagement in procurement, storage, distribution, and for external trade on a massive scale and leave these tasks to the private sector. The government in its new role must be watchful of private sector activities, ensure healthy competition in agricultural commodity markets, and buy and sell in the major commodity markets to safeguard against monopolistic tendencies, excessive profiteering and rising stable commodity prices.

The results of research show that certain markets are not well integrated with each other. In order to achieve the goal of integration government should promote information and develop communication within markets. To accomplish better integration and integration among the markets, infrastructural facilities should be provided by the government to the targeted markets.

Spate irrigation system needs a policy

Post Source: Dawn Economic and Business Review

By Dr Fateh Muhammad Mari

SPATE irrigation is a system for management and use of rainwater and hill torrents that is unique to semi-arid environments. Under this system, earthen diversion weirs are constructed across the hill torrents to regulate water for various uses including agriculture and groundwater recharging through field channels. These field channels are constructed at appropriate places and sides of the spate river. These channels carry floodwater to command areas for irrigation. The weir sites on steep gradient of hill torrent are usually not constructed in order to avoid uncontrollable flows.  Communities using traditional technology usually build these diversion structures and weirs and the water conveyance systems. Their labour contribution is proportional to the size the land on the spate river, command area or their water share. Embankments around agricultural lands to store floodwater are also constructed by these communities. These embankments are 4-8 feet high based on kind of soil and water share.

Water is stored in fields for moisture which is conserved using various techniques. Crops are sown on moist soils which are the only source and no further irrigation is applied except for the rain, if any occurs. Application of 600-1000 mm of water in a single irrigation before planting is sufficient to produce all spate crops provided the soil has good moisture holding capacity. It is also assumed that an irrigation application results 400mm water stored in soils.

Spate irrigation practices are prevalent in various arid parts of the world under various names. Traditional knowledge of Yemen mentions that Queen Saba made Sadds (literally, walls in Arabic) many centuries ago for bringing more and more area under irrigation. Spate irrigation and agriculture is also found in arid parts of the Middle East, North Africa, West Asia, East Africa and parts of Latin America. The British colonial authorities during land settlements in 1872 in the Indian sub-continent had used the term Sadd for what is locally known as Gandha.

An area of 1.2 million hectares out of total irrigated area of 17.6 million hectares in Pakistan is under this system of irrigation which is eight per cent of the area under different irrigation systems in the country. The area under this irrigation in Pakistan, in absolute terms, is highest in the world. . Spate irrigation is used in large tracts of land in hilly districts of Balochistan province including Kachi, Sibi, Loralai, Turbat, Panjgoor, Guwadar, Awaran, Pishin, Qila Saifullah, Dera Bugti, Mastung, Lasbela and Khuzdar districts. Dera Ghazi Khan and Rajanpur districts of Punjab, Dera Ismail Khan and Tank districts in NWFP. Malir, Larkana and Dadu districts in Sindh also do farming under this system of irrigation.

The spate areas depend upon hill torrents during monsoon (mostly June to September) from the adjoining mountain ranges. The spate river flows depend upon the rains. The cropping system, pattern and agronomical practices on spate are highly dependent of timings of rain and magnitude of floods. For example, farmers in spate areas grow sorghum, millet, gowar and melon with intercropping of pulses in case of a good rainfall in June or July. Whereas, if spate rivers flow after mid September due to late season rains, farmers prefer growing barley, gram, mustard with sorghum as fodder.

The local populations and communities have developed substantial wisdom to organise and manage spate river water and the heavy sediment loads. Framers, traditionally, construct one to three meters high dykes/structures locally known as bund or lath to manage the spate (flood) irrigation network in Sindh, southern Punjab and Balochistan.

The life of lath/band is only one flooding season; thus, it is rebuilt after every flood season in most cases. The rebuilding of lath/bund depends on the frequency and flow of spate river (nae) and the availability of labour and bullock power.

There are three types of spate irrigation structures in the traditional system. The first one is dhoro which is the source of water for the main spate river. Dhoro transports the runoff from highland towards main spate river irrigating agricultural fields on its way. Muhaga is subdivided into smaller channels called roonoon , at the third level in the system bringing water to each farm plot. Spate faming in climate change and global food crises scenario is a potential source for food security and livelihood to a large number of communities living in the areas having spate potential.

The state policy for spate irrigation is the need of the time so that water rights are defined and regulation is put in place. Institutional and human resource capacity building programmes and development of material are also areas for attention. Piloting innovative ideas would also help the areas for livelihood of people and to compliment the national requirements for food and ecological balance. Both agriculture and livestock are the major source of people living in the arid areas (mountainous and desert areas) of country, thus, agricultural and livestock extension and support services may also be initiated.

Wheat prices unchanged

Post Source: Economic and Business Review

WHEAT prices remained unchanged at 2630 per tonne in the wholesale market during the week ending December 3 on news that the government has allowed export of surplus wheat by the private sector. The Punjab government had been suffering Rs2.5 billion losses per month as storage and interest payment on 6.1 million tonnes surplus wheat for quite some time. Flour millers said they had asked the government to provide them $100 per tonne subsidy on export of wheat flour and its other products instead of allowing export of wheat. But this did not happen.

“International wheat prices are hovering around $275-$300 per tonne. I fear Pakistan would not be able to sell its surplus wheat at these prices,” said Mr Bilal Sufi, a central leader of All Pakistan Flour Mills Association.

“In Sindh and Punjab government wheat prices are Rs975 and Rs1000 per 1000 kg respectively which come close to $275 per tonne. When you start exporting wheat the cost of exportable wheat, after grading and processing, would rise to $325-$335 per tonne. I wonder how our exporters would compete in the international market.” A trader in Jodia Bazar said wholesalers were aware of this fact and that was why wholesale prices of wheat did not rise after the market got news of the government decision to allow export of wheat. “Besides, wheat exports would be allowed up to two million tonnes only and the country has at least five million tonnes of surplus wheat at the moment. So, I don’t see wheat prices rising even if exports start and even amidst a somewhat increased demand in winter,” the trader said.

Earlier, the government had allowed export of wheat flour up to 200,000 tonnes but flour millers have not exhausted this quota so far. “The reason is, wheat flour market in Afghanistan has been captured by India, Russia and World Food Programme,” said Mr. Bilal Sufi.

A leading exporter of wheat flour Mr. Akhtar Hussain said his company and another Lahore-based company had successful experience of exporting wheat to a number of countries other than Afghanistan. “But we have found that unless we get $100 per tonne subsidy on such exports we cannot earn enough margins to keep our exports going.”

“All Pakistan Flour Mills Association has long been demanding a subsidy on export of wheat flour and wheat products. If the government meets our demand, it would get enough taxes on processing of wheat into wheat flour and other products and unemployed labour would also be absorbed in this business.”

During the week ending December 3, wholesale sugar prices remained stable. Mr Farid Qureshi, General Secretary of Karachi Retail Grocers Group, said they were getting low-quality sugar imported by TCP and offloaded onto the market at Rs6800/per 100 kg and were selling the same at Rs72 per kg, as per the agreement reached with the local government.
But he admitted that retail price of domestic sugar is still Rs90 and even more in some places because it’s wholesale price is Rs8400/100 kg.

After skyrocketing to Rs100-120/kg for some weeks during last month, sugar prices eased across Pakistan and more notably in Sindh after the authorities took over thousands of tonnes of the commodity hoarded by speculators and after TCP was asked to offload imported sugar to ensure its sale at Rs6800/100 in the wholesale market.

Wholesalers said prices of sugar could have eased further had sugar mills in Punjab would also have started full-scale cane crushing. They said almost all sugar mills of Sindh have started cane crushing but many of them that have begun the process only after Eidul Azha are producing much lesser than the others. And in Punjab, not all sugar mills have even begun cane crushing because of a row between them and growers over price of sugarcane.

A Jodia Bazar trader said, during the week ending December 3, cooking oil prices went up in line with higher international prices and on increased demand in winter. The price of a 16-kg tin of cooking oil gained Rs100 to close at Rs2400. He said cooking oil prices might show little increase in coming weeks provided international prices remain stable. He said that prices of pulses particularly of gram pulse firmed up further ahead of Muharram. Pulses especially gram pulse is used in preparing Haleem—the traditional dish of Muharram mourners.

He also said that prices of tea and powdered milk remained almost unchanged during the week ending December 3 but those of dry fruits kept moving up on increasing demand as weather turned chillier.

“Prices of dry fruits are sharply up during this winter not only because of the usual high demand but also because of lower supplies from the flood-affected areas of Khyber Pakhtunkhwa where normal trading activity is also marred by ongoing anti-militant drive. Farid Qureshi said a build-up in demand for dry fruits ahead of Muharram was also driving their prices up.
—Mohiuddin Aazim