November 18, 2003

Uncertainties of Pakistan Wheat Crop May Push Imports
 

The Pakistan government's policy for the next wheat crop is baffling. It is difficult to categorize it and find out precisely what it comprises: callousness towards national needs and the farming community, inefficiency and incompetence of the worst order or success of some segments whose object may be pushing Pakistan to import wheat to feed the populace and eliminate small farmers to pave the way for corporate farming.

Questions about the size of the last crop are still unanswered. The authorities have persisted with their figures but market conditions narrate a different story. Despite vows and claims of provincial administrations to ensure the supply of atta at the existing rate, its price has been soaring. Wheat price has gone far beyond the support rate of Rs. 300 per 40 kg.

The market is buzzing with reports of impending imports to meet domestic needs. All this is unlikely to have happened if the last crop was anywhere between 19 and 20 million tons. Whatever the explanation and contention of the administration, there is shortage of atta in the market and the price of the commodity has increased.

For once, the federal Ministry of Food, Agriculture and Livestock (MINFAL) had moved in the right direction and on time by recommending a raise in the support price of wheat. This was over two weeks back. But the ECC, the all-powerful body that determines economic directions thought otherwise and shifted the buck to the cabinet.

It recently came up with a package for sugar millers who refused to commence crushing even though the delay would undermine the wheat crop; one had expected the ECC to act sternly instead of negotiating with the sugar millers and allowing them to tamper with wheat cultivation. At the same time, it could not bring itself to take a decision on the support price of the vital wheat crop.

Incidentally and ironically, Pakistan Sugar Mills Association rejected the first offer of the government. A more generous offer was consequently made.

The cabinet was apparently preoccupied with more vital affairs of the state and had no time to spare for the wheat crop. This, in effect means that there is to be no raise in the support price. The result is dark clouds across wheat fields even before cultivation for the Rabi crop has been completed.

Many factors have gone into the formation of these clouds and according them grave shades. Shortage of water is one. The delay in the commencement of the crushing season another and uncertainty about the fate of the next crop-misgivings stemming from the farmer's experience from official arrangements for wheat procurement adding to the farmer's disillusionment because of the static support price, completes the dismal bill.

The millers took their time over the crushing issue and the government, while appearing to tackle the problem, went along with them; the industry has in fact been pampered; the government finally accepted its position. The millers were adamant and refused offers that did not fully serve their interests; they are not bothered by the impact, the delay in crushing would have over wheat cultivation. Unfortunately, neither did this situation perturb the government. This has virtually deprived the country of the availability of substantial though yet unassessed percentage of land for wheat sowing.

Cultivation has been largely completed in Sindh; according to an official announcement, sowing had covered about 1.5 million acres in Punjab by the first ten days of November. Amazingly, the target area for cultivation had not been finalized by early last week as the 'target was revised' and details of the new one had not been communicated till then.

Such indecision till the second week of November is unbelievable because November 20 is regarded as the cut-off point for wheat cultivation; sowing after this date involves yield losses. But the government, in its wisdom, has agreed that sugar mills should start crushing by November 30.

These delays are to cost the country heavily and contain all the ingredients for making the small farmer's lot even more miserable than it is at present and adding to the percentage of people living below the subsistence line. It is a recipe for elevation of poverty.

Soon after taking over the reins of the government, General Pervez Musharraf had declared his support for the poverty-ridden farmers.The raise of Rs. 35 per bag of 40 kg announced at the end of 1999 by his administration contributed significantly towards a bumper wheat crop next year.
 

The wheat situation is rather tense up in Pakistan not merely because of total yield but also due to smuggling to Afghanistan and increased use of wheat by the poultry sector in preference to broken rice. These factors have contributed to higher wheat needs of Pakistan. The demand in Afghanistan rose following the reported culmination of American wheat export to the country under the World Food Programme.

Afghanistan has been purchasing wheat from Pakistan's 'exporters' for many years. In the present uncertain conditions in the country, local cultivation has come to a virtual halt. It consequently has to rely more and more if not entirely on Pakistan for its wheat requirements.

Whatever the position taken by the government on the size of the last crop and the availability of wheat and atta now, the US Department of Agriculture realized that Pakistan is to face shortfall of wheat as far back as in June this year and made an offer to the private sector for importing the commodity previously available only to the government. No import has so far been made on this count but one believes that the doors are still open.

They will be opened very wide to the detriment of Pakistan's agriculture and economy if the next crop turns out to be insufficient for domestic ends. The offer was seemingly linked with boosting export oriented wheat products. That is neither here nor there. Once wheat is imported, it may not be possible to restrict its use to specific purposes. That would, regardless of the nominal rate of interest for loan for imports, add to Pakistan's already substantial bill for food imports.

The way out is incentives for farmers. It is late in the day for increasing the support price for wheat because the ideal opportunity for that has been squandered. Still, the hope for earning more from their crop should make the hardy farmers of Pakistan work even harder to produce a good crop. The decision whether to pave the way for imports or try to meet needs from local resources rests with the government.