May
13
Building strategic wheat reserves
Filed Under Business, Laptops, Pakistani News
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The federal cabinet has decided to import 1.5 million tons of wheat this year to deal with wheat and flour crises. Huge rise in prices of wheat and flour has caused significant reduction in the purchasing power of consumers.
The prices go up in case of short supply or rise in demand. But the country harvested a bumper wheat crop of the size of 22.5 million tons, and a surplus was exported as well. It means mismanagement led to creation of such a situation. Hoarding or smuggling or both create shortage.
To avoid such untoward happening in future, the present government has directed efforts to purchase wheat directly from growers in sufficient quantities and to curtail the role of the middlemen in the procurement drive. Resultantly, the government has raised the procurement targets to five million tons.
Every year, the government procures wheat directly from growers to meet food needs of people. Nevertheless, means and ways of procurement are subjected to change every year that make it difficult for growers to bring wheat grains at the government procurement centres. Instead, they prefer to sell it to the middlemen.
For instance, in 2006-07, wheat was cultivated on more area and there was a strong possibility of bumper crop due to favourable climatic conditions, the ministry of food, agriculture and livestock and PASSCO changed the weight policy which discourages growers to bring wheat at government procurement centres.
Harvesting of the crop is about to end in major wheat-producing provinces and there is a possibility that crop size would be 25 per cent less compared to last year due to known reasons. First, wheat was cultivated on less area compared to last year due to late harvesting of sugarcane crop. Second, prices of inputs such as fertilisers also discouraged the growers to cultivate wheat crop. Third, rains and stormy weather conditions at maturity stage would also affect the size of wheat crop.
The government should stock wheat to avoid repetition of past mistakes. Seemingly, the ministry of food, agriculture and livestock and PASSCO have made procurement procedure very easy. Now the middlemen and the growers have equal facilities at the procurement centres. The growers and middlemen are paid in cash up to 100 bags. All commercial banks have been directed to help wheat sellers in opening their bank accounts. While wheat quality is going to be affected due to unfavourable weather conditions, no quality standard has been fixed for procurement. At procurement centres, labour for unloading the produce has also been provided. Now wheat sellers need not wait for unloading. A number of representatives of many agencies are available for monitoring the procurement procedure.
Every year, PASSCO procures wheat from some areas and supplies the commodity to the people of northern areas, Azad Kashmir, Balochistan, NWFP, World Food Programme and the armed forces. According to the managing director of PASSCO, wheat production would be 20 million tons this year and the PASSCO would procure 1.4 million tons. The chief minister of Punjab has advised the ministry of food, agriculture and livestock to procure three million tons. That is the reason that the ministry first placed a ban on movement of wheat across the districts and afterwards across the provinces as well.
To add to this, the ministry has directed its officers to cancel permits and licences issued for private procurement purpose. Hence the permits of mills, ginning factories, oil factories and cotton factories stand cancelled. Initially, the permits of flour mills were also cancelled but later on allowed to procure wheat for 72 hours.
Presently, some six different sectors including the ministry, PASSCO, flour mills and middlemen are engaged in wheat procurement. Owing to engagement of so many sectors in the process, the ministry is facing difficulties in meeting its procurement target.
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