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May 26, 2019

Sindh wheat growers count Rs20 billion losses

Business

May 26, 2019

KARACHI: Sindh’s wheat growers have suffered losses of more than Rs20 billion, as market prices fell in the province after Sindh government failed to provide support price to farmers, growers have said.

Majeed Nizamani, president, Sindh Abadgar Board, told The News that growers faced a loss of around Rs300/40kg. “The province is having a bumper crop of around 4.2 million tons this year,” he informed.

Sindh cabinet had decided not to purchase wheat from growers and export 0.5 million tons of wheat this year out of 0.8 million tons.

The Sindh Food Department had cited the reason that it took loan from different banks of Rs135 billion for the purchase of wheat in the province, of which Rs100 billion were not paid so far.

Agriculture Policy Institute (API), formerly known as Agriculture Prices Commission of Pakistan, notifies the indicative prices of commodities, while the provincial governments provide support to the growers by controlling the prices in the market, called support price.

They do it by procuring certain quantity when prices fall below that price.

Besides, food departments procure wheat to maintain food security.

Growers said that support price of the government controlled the price in the open market, and traders purchased the commodity on no more than a difference of Rs25/40kg, but due to unavailability of support price, average selling price of wheat was Rs1,000 in the province against support price of Rs1,300/40kg.

“It is not wrong if I say we lost more than Rs20 billion this year,” Nizamani said.

It was a privilege of the Sindh government to procure or not to procure wheat from the growers, but maintaining the support price secures the farmer.

“Whatever quantity it procured, we never objected, as it controlled the market prices and traders were unable to exploit the growers,” he said.

The provincial government had procured only 1.4 million tons last year out of 3.6 million tons at a support price of Rs1,300/40kg.

This year, Punjab is procuring 4.0 million tons. Pakistan Storages and Supplies Corporation (Passco) will also purchase wheat in Punjab.

They will give additional Rs100 per bag to farmers to take wheat to the procurement centre.

Earlier this week, Sindh Food Department banned the inter-district movement of wheat in the province. Growers said it would not benefit the growers, as harvesting was almost over and very little quantity of wheat was left with the growers. However, they suspected shortage of wheat with the government alleging theft of more than 100,000 tons from the government warehouses.

“Either mud is filled in the bags or they are empty,” Nizamani said.

Mehmood Nawaz Shah, a grower leader, said Sindh government could have exported the wheat, as international prices had gone up and rupee had devalued in the country.

Government never stopped procurement in last 20 years, it did stop during the government of Pervez Musharraf, which created the issue of food security, as fewer growers sowed wheat next year, Shah said.

The country had to import wheat from Russia and Ukraine.

Despite of decrease in wheat prices in the province, prices of wheat flour have increased in the retail market.

Farid Qureshi, secretary general, Karachi Retail Grocers Association said flour price increased by Rs2 per kg before Ramazan. “They (mills) say they will further increase the prices in coming days,” he informed.

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