From the common man to wheat farmers, retailers, flour millers and
chakki owners, all are complaining about the shortage of wheat in the country.
Now, a federal minister –
Federal Minister for Food Security Fakhar Imam – has also joined the chorus
that where has wheat gone just within a couple of months of its harvesting
season.
Why Pakistan, which has been storing surplus wheat since 2010, has
come to
a point that wheat is hard to find in the open market at government’s fixed
price, while flour is also being sold at inflated rates.
Minister Fakhar Imam has said
on the floor of the house why wheat and flour are being sold at exorbitant
rates soon after the harvest season. He went on to say more than six
million tonnes of wheat was bought from farmers in April and May “which has
vanished in the market”.
Minister Fakhar Imam needs to
be corrected.
He says that six million tonnes of wheat has vanished.
Here are procurement and storage of wheat updates.
For 2020-21, the Federal Committee on Agriculture set a
procurement target of 27.03 million tons from 9.2 hectares (22.73 million
acres) in 2020 in the sowing season. When the target was set, it was predicted
that Pakistan would get a bumper crop this year, almost two million tonnes more
from the five-year average (25.38 million tonnes) but below previous
expectation of a bumper output,” Food and Agriculture Organisation of the
United Nations says. The average production stands close to the total annual
requirement for the grain in the country.
Everything went well until March and April 2020 when hailstorm
with relentless depleted the prospects of the bumper crop. In many places, the
standing crops were demolished overnight, thanks to abortive weather patterns.
By the time, the procurement drive ended, the government was far
behind its target. It could buy 22 million tonnes.
This 22 million tonne wheat is well stored in provincial
governments’ and Passco’s warehouses.
Where is six million tonnes of wheat gone?
This is the question Minister Fakhar Imam has raised too.
Let us talk to flour millers and farmers to trace the missing
stock.
Ibrahim Mughal is the Agriculture Forum of
Pakistan chairman.
He said the target of 28 million tonnes was
unrealistic from the very beginning given the fact that this year the wheat
cultivation area was 21 million acres only against the target of 22.73 million
acres from October 2019 to February 2020.
“When the sowing acre is less from the previous
year, how can you expect three million tonnes more wheat from the previous
produce?” he questioned the logic of the government’s wheat target.
He explains the reason behind shortfall in sowing
acres.
“In fact, it is the soaring cost of production,
such as higher fertiliser prices, and a low support price (Rs1,450 per 40kg for
the current year) hardly encouraged the farmers to sow wheat seeds on a larger
area,” he said.
Moreover, weather was not kind this year too.
This year, erratic rain and hailstorm battered the wheat crop in
central and south Punjab, the main capital of wheat forms. Besides weather, the
yellow rust attack just before the final stage also left the wheat farmers
reeling.
So, high production cost as well as bad weather ate up almost two
million tonnes of wheat.
Flour millers insist that government’s flawed policies as well as
pandemic added up to the wheat problem.
Majid Abdullah runs a flour mills in Lahore and is the head of the
Progressive Flour Millers Group.
He calls government’s wheat
policy flawed and that “the government itself created the crisis”.
“The government set a wrong procurement policy where no flour mill
was allowed to buy the produce,” he tells this scribe.
“Earlier, flour mills would buy about one million tonnes of wheat
to keep their mills running before the government released wheat to them in
October every year. This year, the government banned flour mills from buying
the wheat from farms. In the open market, the staple food is being sold at
Rs1,800 to 2,200 per maund. How is it possible for millers to buy wheat at
Rs2,200 and sell it at Rs1,450?”
When the Punjab government has started releasing wheat to flour
mills, why is flour still not available at government fixed prices?
“Well, the (Punjab) government is releasing only 17,000 tonnes of
wheat every day under its interim policy approved in the first week of July,
whereas the demand is 25,000 tonnes. Unless the shortfall is not met, flour
will hardly be available at Rs850 per 10 kg.”
The Punjab government, however, cannot risk releasing 25,000
tonnes of wheat a day as it will deplete its wheat reservoirs by February or
March. It has already started releasing the wheat in July instead of October.
Moreover, the other provinces are still sitting on their stocks. Sindh has
clearly said it will release wheat from September.
In this situation, the flour price cannot be stabilized.
Punjab Food Secretary Asadur Rehman, however, rejects the
impression that the target was unrealistic or the weather factor damaged the
crop.
“We have seized hundreds of tonnes of wheat from hoarders, which
we will supply to flour mills at official rates,” he said. He
also accused the flour mills of hoarding wheat.
Majid Abdullah, however, rejects the food secretary assertions and
say that the government is welcome to raid mills and confiscate the stocks.
He advises the government to arrange 1.6 million to two million
tonnes of wheat stock at the earliest.
Now, the million dollar question is: how to arrange the food crop?
In the international market, wheat is available at Rs2,000 per
maund, and when added transportation and storage and supply charges, it will
reach Rs2,200 per maund.
The government will have to go for wheat import. In fact, the
government has already reached the international market to buy the wheat stock.
Ministry of the
National Food Security and Research Omer Hamid Khan says they have allowed the
private sector to import wheat and in this regards private buyers have placed
orders for import of 270,000 tonnes which is due by September.
The thing to be noted is:
will the government allow private buyers to sell wheat at Rs2,200 or they will
be restricted to sell flour at Rs850 per 10kg?
So, wheat stock
is available with provinces and Passco, and of them only Punjab is releasing
interim quota to flour mills. Flour prices will be come down in September and
October when all provinces will start releasing wheat to flour mills.
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