Archive for the ‘2009’ Category

Wheat price crash

Post Source: Dawn Economic and Business Review (April 26 to May 02)

By Ahmad Fraz Khan

With the crash in wheat prices, the growers in Punjab are in trouble. In southern and central part of the province, where almost 40 to 45 per cent of harvesting and over 20 per cent of thrashing has been completed, wheat price is down at Rs750 per 40kg — Rs200 lower than the official procurement rate. The farmers have estimated the loss so far at a staggering Rs6 billion. It is feared that the situation may worsen as more wheat arrives in next two to three weeks.

At the heart of current wheat crisis is the provincial financial crunch, which has severely reduced provincial options. Though it is squarely to blame itself for the situation, the farmers are sharing the cost of its follies. During the last one year, Punjab, carrying huge stocks, spent the entire food subsidy on wheat stocks.

Instead of cash subsidies, it turned to be in kind; issuing low priced wheat for two huge schemes – Ramazan package and low priced bread (sasti roti). In both schemes, the food department issued subsidised wheat to millers and never got subsidy money from the provincial government. Neither it got the money to service its massive loan (Rs149 billion which was borrowed to complete enormous procurement drive of around six million tons) that was a hefty Rs1.2 billion per month.

Things became worse for the food department when the Punjab government failed to get permission for export of surplus wheat and is still carrying a Rs96 billion bank loan against three million tons of carry over stocks.

The Punjab government had been running from pillar to post to get money for procurement but has not got it, at least so far. The vague promises have not only robbed it of confidence to launch a full fledged procurement drive but also increased speculative pressure on wheat prices.

Knowing well that it does not have money to absorb wheat arrival once it gains momentum, the entire provincial set up is busy giving excuses to deflect the blame. As more and more decibels are added to farmers’ protests against price crash, the food department has been telling every one that “crop size has not been the same because of persistent drought and unusually hot March.” It has conveniently forgotten that drought was virtually broken during February and hot March only helped crop mature early.

As the campaign neared, the department shifted the stance and is now tell everyone that harvesting still has not gained momentum and wheat arrival is still slow. It has not lent ears to farmers’ cries. The official attitude is dictated by lack of money.

The Punjab government knew that its role is always crucial in setting the price on higher side as it traditionally entered the market with ready cash of billions of rupees. This time, its absence has led to price crash.

Wheat price in the province is between Rs750 and Rs800. It implies that there are buyers in the market, who are ready to purchase the crop at substantially less price. It also means that commodity has started arriving in the market in enough quantity that is more than what the food department or other official agencies were absorbing.

According to the farmers, the middlemen and the millers are actively buying wheat at the crashed price. They are benefiting from the official policy, which has made the selling of wheat to official agencies a tedious and time-consuming job. All departments, known for their corruption – like the revenue department – are involved in the issuance of gunny bags making the process painful for farmers. The provincial government is helping these departments in slowing down the process.

Had the official claims about size of the crop been true, the price crash would not have been as severe as it is. It is lower by 20 to 25 per cent in different parts of the province, according to the media and individual reports. The Punjab government, surviving on a huge over-draft from the State Bank of Pakistan, has also received a tinker from the central bank for its deteriorating fiscal health and cannot spare cash. How would it deal with the crisis is anybody’s guess?

The federal government must chime in with some help, if it does not want to gloat on the political cost that blundering PML-N government in Punjab would pay. It needs to take bigger view of the picture. Though it has financial problems of its own, it must realise that it has contributed to provincial problems and price crash. It asked the Punjab government to keep 2.5 million tons as strategic reserves and promised to pay Rs60 billion as cost of reserves. But it has made no payment so far.

The federal government also refused permission for export of surplus wheat stocks right till the last momentum and forced Punjab to keep holding those stocks at huge financial and incidental costs. It is time that it somehow helps Punjab arrange money in order to pull the provincial government out of the fiscal mess, and shore up sagging wheat price.


Labour Day Celebration “Women Peasants and Workers:

Labour Day Celebration by South Asia Partnership Pakistan

Respected Colleagues,

Hope you are doing fine. South Asia Partnership Pakistan is going to organize a seminar on “Women Peasants and Workers: Challenges and Way forward” on 30th April, 2010 at HRCP Office, Lahore at 2:30 p.m.

The main purpose of this seminar is to highlight women peasants and workers issues at policy making level and facilitate the process of effective
legislation to resolve their problems.  We cordially invite you to participate
in this seminar. 
Your participation will strengthen the efforts of civil society organization and will cause to generate debate on their rights within policy makers. Please do acknowledge the receipt and confirm your participation as early as possible.

Looking forward for a prompt response,


Shakeel Ibrar
Program Officer

Vegetable growers await compensation

Post Source: Dawn Economic & Business Review – By Tahir Ali
Monday, 28 Dec, 2009

VEGETABLE growers in Swat are still waiting for the promised compensation for the huge losses they suffered during the recent armed conflict in the area. Officials say the relief package is in the offing. Officials and farmers estimate that Swat, famous countrywide for its tasty vegetables like potato, turnip, cabbage, ladyfinger etc., had suffered around 50 to 70 per cent crop losses.

Swat is the centre of off-season vegetables production. According to initial assessment of damages by the Food and Agricultural Organisation (FAO) and the district government in July 2009, the losses stood at 62 per cent for vegetables.

According to one estimate, the overall loss was around Rs1.4bn in two years. This estimate by the Aryana Institute for Regional Research and Advocacy, Islamabad, does not include losses incurred during the military operations in the area.

An official from the Swat agriculture department said that Swat had suffered a total loss of around Rs1.6 billion in vegetables. A senior provincial agricultural ministry official said that the government had completed the assessment and recognised to the need to compensate the damages.

“The government will compensate the farmers for their vegetable losses. A PC-1 has been prepared and is under process. It is expected to be approved shortly after which the farmers will receive the compensation.

“We intend to provide seeds, fertilisers and pesticides to the affected farmers. Besides, the government will also arrange for them tractors and other field-leveling machineries,” said the official wishing anonymity.

Provincial minister for agriculture Arbab Ayub Jan has also promised that the farmers will be compensated and will be given free or subsidised inputs in the area. Meanwhile, the government has been advised to ensure community participation in its endeavours.

“Swat is a major source of onion for the country. Onion is grown on over 4,000 hectares here. Around 67,000 metric tons of onion worth Rs669 millions were lost,” an official said.

“I had sown onion in my field but could not harvest the crop which caused me a loss of Rs0.1million,” said Abdur Rahim, a farmer from Kanju in Swat.

President of the model farm services centre, Swat, Mohammad Naeem said the region produced 70 per cent of the province-wide output of onion.

“We had to abandon our crops/harvests. A large quantity of vegetables decayed as there was no transport available owing to long duration of curfews. Marketing also suffered for non-supply of packing and grading materials and lack of labour,” said Naeem.

Malakand Division also is rich in vegetables. It accounts for almost half of province-wide vegetable output while Swat has one-third of it. According to an estimate by the South Asia Partnership, the share of Swat in national production of tomatoes is 13 per cent.

Tomato was cultivated over 7,000 hectares in Swat. The crop was lost entirely as it matured in May and June when internal displacement of people had taken place. Though prices of tomato and onion skyrocketed due to lower supply in the market countrywide, Swat farmers could not benefit.

“I was earning around Rs0.2 million from my tomato crop annually. But last year there was no income from the crop,” said Maimoon Khan, another farmer from Kanju.

Around 80 per cent people in Swat depend on agriculture for their subsistence. There are around 0.3 million farmers, a majority of whom – around 80 per cent – are small/poor farmers who don’t have money to buy agricultural inputs.

“We have not received any compensation so far” said a farmer. He said the government and NGOs should assess the damage and provide aid through MFSC and the agriculture department to thwart corruption and exaggerated claims. “Agriculture inputs and technology should also be offered to farmers of the area.

Another farmer said the non-governmental organisations were doing commendable job to support the farmers in their hours of need. “But the problem is that their support is also restricted to the suburbs of Mingora. The far-flung areas like Kabal, Matta and other upper Swat areas are yet to be given the badly needed relief.”

Initiative for doubling sunflower acreage

Post Source: Dawn Economic & Business Review – By Ahmad Fraz Khan
Monday, 28 Dec, 2009


Federal Minister for Food and Agriculture Nazar Muhammad Gondal recently visited Lahore to announce a plan for doubling sunflower acreage in Punjab in one year. The plan also envisages fixing support price for the first time in country’s history and promising official intervention if the price comes down below the newly fixed line. Sounds good!

Given the multiplying edible oil import bill, which burgeoned to a staggering figure of $1.5 billion last year, the initiative should be welcomed and government should sustain it with required seriousness. The effort shows that the government is alive to the situation, and intends to contain the bill.

According to the ministerial plan, Punjab will increase its acreage from last year’s 242,000 acres to 480,000 acres this year – almost 100 per cent increase in a year. The increase in Punjab, food basket of the country, would hike the national acreage figure of 930,000 acres last year to 1.25 million acres this year.

But beyond good intentions, agriculture needs meticulous planning and a careful execution before any benefit can be claimed. The planning part is almost missing in the entire federal scheme of things, and it raises more questions then it answers.

For example, who is the owner of the new plan: the federation or the Punjab? The federal government has announced it but the province is not ready to execute it. According to the ministerial announcement, the Punjab – holding the key to success – has to spare good quality additional 250,000 acres land for cultivation. Unfortunately, Punjab was not taken on board before the announcement. The Punjab, thus, does not own the plan.

It does not own the plan because it flies in the face of its peculiar cropping pattern and ground realities. For example, the federal government plan asks Punjab to spare around 400,000 acres for sunflower deep in cotton belt – Multan, Bahawalpur, Lodhran and Vehari districts.

Both sunflower and cotton are deep-rooted and soil-exhaustive crops. They need massive quantity of fertilisation and other nutrients. If one crop succeeds other, the soil may not be able sustain the pattern for long despite multiplying investment on soil fertility.

Another problem is that sunflower crop is a white fly carrier, which would only ensure pest attack on the following cotton crop. This year, the Punjab, and the country, would miss its cotton targets for the fifth consecutive year because of virus attack. Can it risk cultivating a pest-carrier deep in the cotton belt? Of course not!

The sunflower crop also does not make fiscal sense in current scheme of things. Since it is sown in January, it could only replace wheat. It is harvested in May, and could only delay the cotton sowing well in June, making it more vulnerable to virus attack, as shown by the attack pattern this year – the late sown (May-June) cotton crop was almost destroyed by virus. No farmer could risk his sure and healthy income in wheat and risk it unknown sunflower.
Unfortunately, Punjab’s agriculture department, as people say, is only a “big crop branch.” It is designed, maintained and geared only to produce crops like rice, wheat, cane and cotton. It does not have expertise for “off-beat crops,” like sunflower.

It also concentrates on big crop due to its human resource poverty. Some 400-odd agriculture graduates are attending 3.8 million farmers’ families, and one agriculture officer covers some 70 villages – an impossible task. No wonder, it only attends those crops, which are sown and mature due to their own momentum, rather than those that need some additional man-hours for maturity.

The newly-announced support price of Rs1,600 per 40kg hardly adds economic attraction to the sunflower crop. The current international sunflower price ($650 per ton) is attractive enough for farmers, but it loses its lustre when taken in the backdrop of mid-year prices when Malaysian Palm Oil crop draws them down heavily. That is the time when the local sunflower crop hits the market.

Beyond these market realities, the farmers have their own way of calculating sunflower price. They claim it must be double the wheat price, as its production is almost half and it taxes soil so heavily. By that calculation, the sunflower prices comes around Rs2,000 per 40kg.

The Punjab Agriculture Price Committee had recommended a price of Rs1,745 per maund and the federal government must have made its own calculations. And the final price was reduced to Rs1,600 per maund.

Promising to launch Pakistan Agriculture Services and Supplies Corporation (Passco) into procurement hardly inspires confidence in farmers, especially after its second year failure on the rice front.

In a nutshell, the Punjab and farmers need answers of many questions before jumping onto the federal bandwagon for sunflower planning. They are valid question and must be attended to save other crops as well.

There is hardly any denying that the country needs to control its edible oil import bill, but doing so needs realistic planning. There are solutions available, but would only be achieved through integrated planning and execution. The Punjab has a huge barani (rain-fed) belt that can be used for sunflower cultivation.

Another solution could be a high-yielding local seed, which could take production beyond 15 maunds an acre and make market sense for farmers.

For those solutions, the federal government needs to sit with provinces before launching any high-profile schemes. It also needs to understand provincial realities and try to find ways within those realities. Planning from outside neither helps the federation not provinces nor farmers nor agriculture.

Ministry not ready to ban yarn export

Post Source: The Nation – December 17, 2009 

ISLAMABAD – Another meeting between Ministry for Textile Industry and Trade Associations of value-added sector ended with no results, as the ministry did not accept the major proposal of the association to ban the export of yarn, it is reliably learnt. According to the sources, trade associations of value-added sector has come with many proposals and suggestions regarding availability and prices of yarn in the country, however their major demand was to impose ban on the export of yarn. But the meeting did not prove fruitful, as the Government did not announce any strategy regarding yarn, sources informed.

The Ministry of Textile Industry called an emergency meeting of value-added textile sector on Wednesday to resolve the issue of rising cotton yarn prices in the domestic market. The sources further informed that representatives of the associations in the meeting demanded of the Government to impose ban on the export of yarn as by doing this it would be available to the domestic consumers.

The ministry before the meeting asked all the value-added textile associations to come up with suggestions and proposals to resolve the issue in a positive manner, but the issue did not resolve in the meeting, the sources further disclosed.

This was the third consecutive meeting on the said issue, as the cotton yarn prices in the domestic market have mounted to a peak level because of rising export of the commodity, sources informed. However, they said like two previous meetings no result has come out from the third meeting, as the ministry has come with no strategy regarding availability of yarn in the country.

The representatives of the value-added textile sector already said that this would be the final negotiations with the Ministry of Textile for the imposition of ban on the export of cotton yarn and they would never negotiate any further if these dialogues remained unresolved.

Before Wednesday’s meeting, a leading textile exporter said, “We will never approach the Ministry of Textile after the meeting if the Government doesn’t come with solution of the problems. The ministry is not serious in taking stern action against exporters of cotton yarn,” he added. For the last four months, cotton yarn has not been available to the value-added textile sector in Pakistan. Due to the acute shortage of yarn in the country, over 50,000 power looms have been closed down while other 40,000 looms are operating partially. The situation is further escalating the rate of unemployment, as more than 2,000,000 people are directly associated with the textile sector.

Farmers’ bodies reject Rs1600/40kg sunflower price

Post Source: Staff Reporter The Nation – December 15, 2009  

LAHORE – The Federal government has fixed minimum purchase price for the sunflower crop for 2009-10 at Rs 1600 per 40-kg in order to encourage the farmers to grow sunflower on maximum area and ensure due return of their produce. However, farmers’ organisations including Pakistan Muttahida Kisan Mahaz (PMKM) have rejected the price, demanding the government to fix Rs 2000 per 40-kg as the minimum purchase price of sunflower.

Addressing a press conference here at the Pakistan Agricultural Storage and Services Corporation (Passco) headquarters on Monday, Federal Minister for Agriculture Nazar Muhammad Gondal said that this year, the government fixed target of sowing of sunflower on 1.1 million acres of land throughout the country.

“Farmers can get 800,000 tons of sunflower crop, if the sowing target is achieved that can help produce around 2,86,000 tons of oil. Price of this oil has been calculated at Rs 25b in the international market,” the Minister said.
He further said that oil produced out of crop sown on this targeted area would save $360m to the government reducing the dependence on import.
He said the Pakistan Oilseed Development Board (PODB) and the MINFA in consultation with the Pakistan Vanaspati Manufacturers Association (PVMA), Solvent Extractors Association, Seed Companies and farmers have decided the new minimum purchase price for the coming sunflower crop. He said that the industry circles also promised to buy the crop and ensuring payment of the crop according to the minimum purchase price announced by the govt. The minimum-purchasing price last year was Rs 1300/maund, he claimed.
‘While the seed companies have promised to provide quality 2200 tons of sunflower seed to the farmers needed for sowing on 1.1m acres of land,’ he added. He advised the growers to sow sunflower on maximum area and the govt would ensure the price. He said that the Passco would facilitate the buyers and the govt would facilitate the growers.

On this occasion, representatives of the industry claimed that increase in minimum purchase price would not affect the prevailing ghee and oil prices, as the new minimum purchase price was being announced in line with the prevailing international oil prices.
Replying to various queries, the Minister said that the PODB was constituted in 1995 by late Benazir Bhutto to increase production of oilseeds in Pakistan and reduce dependence on import of edible oil. At present import bill of edible oil was around $2b. He regretted that no government paid attention towards this Board after PPP government. He said that now present government had reconstituted its board with representatives from Ministry of Agriculture, Solvent Extractor Association, Pakistan Vanaspati Manufacturers Association, Seed Cos and farmers.

At present, he said the Board was working on increasing olive, canola, palm oil and other oilseeds. He said that the government had recently started working on a palm oil extracting machine in Thatha area while an extracting machine for olive oil had already been installed. He said that all these crops would support the government efforts to reduce dependence on edible oil import.
Meanwhile, farmers’ organisations including Pakistan Muttahida Kisan Mahaz, Agri Forum Pakistan and others have rejected the support price announced by the government and demanded to fix it at Rs 2000 per 40-kg.
Pakistan Muttahida Kisan Mahaz (PMKM) Chief M Ayub Mayo rejected the support price announced by the government and said his organisation had announced in a farmers’ moot held recently which demanded that price of sunflower should be fixed at Rs 2000 per maund. He also said that due to this same reason area under sowing for sunflower had reduced in 2008-09.
Ayub Khan Mayo also said that this year the country had to import palm oil worth over Rs one billion from Malaysia and Indonesia to meet the local demand. He said that the government should encourage the local growers to reduce import bill by protecting the rights of the growers rather than exploiting the situation.

Chief of Agri-Forum Pakistan Muhammad Ibrahim Mughal said that sunflower crop was sold at Rs 1800 per maund some three years back. He said during these three years prices of diesel, fertilizers, seeds and other inputs had increased by 20-25pc. The per-40 kilogram cost of production is Rs 1850 per maund, then how the farmers would bear the loss. He claimed that there would be negligible sowing of sunflower in Punjab if this price is not revised immediately and fixed at Rs 2000 per maund.

Most peasant women cheated in land distribution, says study

Post Source: Dawn – By Habib Khan Ghori 

KARACHI, Dec 10: More than 50 per cent of the peasant women beneficiaries of the Sindh government’s land distribution programme are awaiting ownership documents. In some cases influential people have grabbed their land. They have even been allotted land reserved for graveyards, or sand dunes or waterlogged areas, reveals a study.

The study, titled ‘Sindh government’s land distribution programme: issues and challenges’, was conducted by the Participatory Development Initiatives with the support of Oxfam GB.

Launching the study in a local hotel on Thursday, PDI Director Sikander Brohi said the study had shown that over 50 per cent of women land grantees were still without legal land ownership documents.

Although at the provincial level, the Sindh government had taken a number of initiatives to ensure transparency in the process of land distribution, its implementation at the district level was cumbersome.

“The Sindh government had formed a steering committee at the provincial level to oversee the process and had issued strict instructions that such joint land distribution committees of different stakeholders should be formed at the district level. And the land identified for the distribution should be free from all the issues and should be cultivable land and proper criteria should be implemented for the identification of the land grantees,” the study said.

But, unfortunately, Mr Brohi said, at the district level the process was not participatory as only the revenue department was the key player and other stakeholders were not taken onboard. As a result, in many cases the land identified for the distribution was uncultivable, at some places it had sand dunes and at others it was waterlogged.

According to the study, the process of the identification of the beneficiaries was also flawed. In many cases land was allotted to relatives and people of the clans of political influential persons. In some cases, poor land grantees have received very small portions of the land, as small as one-and-a-half or two acres, while women belonging to influential families have received even more than 15 acres.

He said that according to the study the poor women had even been allotted graveyard lands, land with big ponds or sand dunes and even the pieces of land eroded by the sea. According to the study, a large number of women could not benefit from the programme due to the poor publicity of the land distribution and arranging open kachehries for the distribution of land in influential people’s drawing rooms.

Recalling the post-land distribution issues, the study has identified lack of legal ownership documents to the land grantees as one of the key issues as due to the only simple allotment lists or letters, there is a threat looming large over those women that their land might be cancelled and given to other influential women.

The study has documented many cases in which the land given to a woman has been cancelled without reason and re-allotted to another woman. The study has said that due to the lack of ownership documents (Form 7) in the name of the land grantees and no demarcation of the land granted, in many cases influential persons have either occupied the land granted to women or have filed appeals in the revenue department against the land grant, stopping women from cultivating their lands.

The study has recommended to the government to issue land ownership documents to all the land grantees without delay, make the second phase of the land distribution process more participatory and bring changes in the legal framework to ensure sustainable ownership of the land by the women.

Speaking on the occasion, Neva Khan of Oxfam GB said her organisation was working for rights of the poor and marginalised communities and that was why it had decided to support the local communities in the land distribution process.

She expressed the hope that the Sindh government would take serious notice of the flaws in the land distribution programme as identified in the study and would make efforts to rectify them.

MPA Humera Alwani demanded that elected representatives be given proper representation in the entire process. She said that due to lack of participation of leg islators, not only that uncultivable land had been given to poor women, but influential people also got allotted land in the name of their family women and even in the name of their women servants.

Giving the government viewpoint on the land distribution programme, Secretary for Land Utilisation Subhan Memon admitted that flaws had crept into the programme’s implementation. He said about 65 land grantees were genuine who had been provided seed and other inputs for the cultivation of the land.

He said they had learnt a lot from the process in the first phase and would soon launch the second phase, with more clear and improved legal framework and implementation mechanisms.