Managing wheat support price

Post Source: Dawn economic & business review

By Mohammad Hussain Khan

HARVESTING of wheat has started in Sindh, particularly in lower part of the province, with government`s procurement target fixed at 1.3 million tons that is lower than last year`s 1.5 million tons. However, the growers expect a bumper crop and want the target to be scaled up. Around 2.2 million acres were brought under wheat crop in the vast katcha area of the Indus River with the growers taking advantage of increased fertility and huge silt deposits the Indus brought in the wake of floods last summer. According to reports, weather conditions and water availability even in non-perennial areas remained favourable for the crop.


Last year wheat was grown over 10,92,000 hectares against the target of 10,31,000. According to provincial agriculture officials, this year the area would cross 1.1 million hectares with an expected yield of 3.7 million tons. The growers have been stressing the need for better management of the produce as the province lacks proper storage facility. Timely procurement, appropriate preservation and fumigation of the crop are some of the important measures needed to benefit growers and consumers. Currently harvesting is in progress in lower Mirpurkhas, Tando Mohammad Khan, Pangrio and Kunri. It would pick up pace once the labour force is free from sugarcane harvesting which is at its fag end.


The present price of wheat in the open market is at around Rs975-1,000 per 40kg against the government`s support price of Rs950. With the harvesting coming in full swing, wheat prices may drop below the procurement price. Consequently the middlemen and hoarders would reap the benefit and some of the crop may be smuggled.

The food department has decided to open procurement centres from April 15, while the growers demand the procurement drive to start from April 1. It has sufficient wheat stocks from last year which has kept flour prices stable in the market.


Sindh Abadgar Board (SAB) general secretary Mehmood Nawaz Shah points out that in the international market wheat price is rising for the last several months. He says wheat price in the international market at $330 per ton is equivalent to Rs28,350 per ton or Rs1140 per 40kg. Shah says the support price has not been increased over the last three years. The government can purchase the crop at Rs950 and export it for Rs1150 per maund. “PASSCO should also be acti- vated and directed to purchase wheat from Sindh to support the growers” he said.


According to Director Sindh Food department Talib Hussain Magsi, procurement centres would start functioning from April 15 as the department is not ready to buy wheat with higher moisture level. “We set target as per federal government`s directive,” he said. Wheat purchase would start after the crop gets fully matured, he adds. “We can only store 670,000 tons of wheat in our indoor storage system. The rest would be kept under the open sky,” he says. The food department has purchased 85,000 gunny bags and some of them were already with the procurement department, he says. The government plans to ban inter-city movement of wheat in Sindh to ensure the procurement target. But SAB president Abdul Majeed Nizamani, opposes the idea on the ground that it would open gates for corruption and the food officials would have a field day. He says that districts which have surplus production, as far as their target is concerned, would have to send crop to other districts. The government should avoid banning crop movement, he pleads.


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