Curb on wheat movement to hurt small growers

Post Source: Dawn Economic & Economic Review

By Mohammad Hussain Khan

THE ban imposed on inter- district movement of wheat by the Sindh Food Department will benefit the middlemen or traders and hurt the small growers. Farmers fear that with the ban continuing and harvesting of a bumper crop getting into full swing, price of the grain would drop as hoarders and middlemen would be free to caiptalise on the situation. They will connive with the food and police officials to take the crop to Karachi from other districts and mint money. All Pakistan Flour Mills Association, Sindh chapter, president Mehmood Hassan is worried that price of 100kg bag of wheat has jumped to Rs2,450 from Rs2,350. He believes the one kg price of flour would also increase which was otherwise showing stability at Rs28.50 per kg.

Until the ban imposed on April 10 for one month, wheat price stood at Rs880 per 40kg against the support price of Rs950. At the early harvesting stage in lower Sindh, growers even sold 40kg of wheat at Rs925. There has been a demand from growers to increase the support price which is static for the last three years.

Small growers of wheat are usually exploited by food officials. But the ban on movement of the crop hurts them more. They approach the nearest official procurement centre of the food department to sell their produce along with form-VII of their land showing its ownership to get gunny bags.

The officials demand commission for the gunny bags which they are unable to pay as they don`t have large quantity of wheat. The call deposit for gunny bags is refundable and growers bear the cost of unloading of crops at centres. To avoid the hassles, they sell their crop to middlemen at lower rates. Those providing crop to food department also have to pay commission for collecting call deposits for gunny bags.

“It is unfortunate that the government underscores the need for increasing wheat production and when the growers do it, they are slapped with ban on crop movement,” says Anwar Bachani, general secretary of Sindh Chamber of Agriculture.

“The ban is to support middlemen only as food officials don`t provide bags to small growers, who ultimately sell their crop to middlemen,” he says. He talked about a nexus between the middlemen and the food officials. The latter buy crop from the former at official price after getting commission but do not offer actual price to small growers. Presently, average wheat price offered to growers ranges between Rs800 and 850, he says.

This year the government has fixed procurement target at 1.3 million tons against 1.5 million tons of last year. Growers` representatives have termed it unjustified in view of the size of the crop. Ever since last year`s floods, bumper crop was predicted.

According to Sindh agriculture crop reporting service, wheat was cultivated on around 10,92,000 against the target of 10,31,000 hectares. After floods the katcha area on both sides of the Indus – around 2.2 million acres – was brought under wheat cultivation.

Climatic conditions remained favourable with ample supply of water. Even in February and March when water is needed the most for healthy grain no complaints of water shortage were received. Since then growers have stressed the need for better management and timely procurement of the crop.

Now the growers have reacted against the ban on movement of wheat on the ground that it is illogical that when there is a bumper crop, free market mechanism is being curbed.

Sindh Abadgar Board (SAB) general secretary Mehmood Nawaz Shah believes that the fear of the food department that it will not be able to meet the procurement target of 1.3 million tons despite bumper crop is ridiculous and hence the ban on the movement of the crop is unjustified. “We demand that gunny bags should be provided to growers to obtain the required results,” he remarks.

He foresees a sharp increase in flour prices which consequently would affect the consumers. “Losses to growers will increase as price of wheat will drop following ban,” he says. “Let traders export wheat freely and open market dealers offer fair prices to growers,” he advocates.

Mir Zafarullah Talpur, vice-chairman of the Sindh Chamber of Agriculture (SCA), Mirpurkhas region, alleges that the ban will lead to leakages. He says food department will issue permit selectively to transport wheat and everyone knows how permits are issued. “So growers are not going to get fair price,” he observes. He points out that free market sale always benefits growers as they have choice to sell their crop in market or to the food department.

The signals from government circles are confusing. Apparently, the department is finding it hard to achieve the target. Food Director Talib Magsi says that ban can be extended further for a fortnight after its expires after one month to achieve procurement target of 1.3 million tons. But Sindh Chief Minister told journalists the other day that Sindh government was approaching the federal government to get target for Sindh increased to 1.5 millions tons in view of the bumper crop.

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