December 03, 2003

Pakistan Faces Shortfall in Wheat Crop in 2004

Farmers of the Punjab in Pakistan on Tuesday feared that there might be a shortfall in wheat crop next year due to the delay in cane-crushing season, late announcement of the support price and better returns on cotton.

"The government delayed the announcement of support price by at least two crucial months," said Sadiq Khaqwani of the Pakistan Kissan Board. It had received a summary about the support price in early October and was expected to announce the final decision by the middle of the same month, much earlier than the start of sowing season, he said.

But the Economic Coordination Committee (ECC) took almost two months to announce an increase of Rs50 in the support price. Had it announced the price by mid-October, it could have encouraged farmers to go for wheat in a big way. But regrettably, it did not and thus discouraged farmers from opting for wheat.

Wheat crop had lost its economic viability at the previous price of Rs300 per 40kg, said an official of the Farmers Associates Pakistan. Many of the farmers would sow the crop only for domestic consumption and avoid the extra sowing which normally constituted a tradable surplus.

The late announcement encouraged them to avoid wheat for economic reasons. The cost of inputs had gone up substantially during the last two years. The imposition of general sales tax on fertilizer, pesticides and weedicides has already made the crop an economic liability. The continued water shortage in Rabi season only worsened the crisis.

The Punjab government had itself calculated the production cost of wheat at Rs450. Now, it has announced a support price of Rs350 and still expects the farmers to go for it in a big way, he said.

In addition, maintains an official of the Agriculture Chamber, the unusual delay in cane-crushing only further accentuated farmers' problems by causing a severe cash crunch at the time of sowing. Most of the farmers in the Punjab did not have the liquidity to buy the fertiliser needed at the time of sowing. This further reduced wheat sowing, he regretted.

Normally, the crushing season starts in October and allows a majority of farmers to complete sowing by mid-November. But this year has been an exception. "A powerful import mafia working in the government is to be blamed for the crisis," he said. Had the government been able to solve the crisis of carry-over stocks with sugar millers and announce the support price in time, it would have saved the country from wheat crisis. But it did not, and the country may end up importing wheat next year, he feared.

"Even better prices of cotton may have worked against wheat sowing," said a farmer from southern Punjab. The cotton price has now been internationalized. Farmers are getting a much higher price for cotton and are waiting till the last moment before clearing the fields. This would also not help wheat sowing, he said.

As wheat sowing has been delayed, most of farmers may opt for alternative crops like sunflower and canola. It does not make sense to sow wheat after mid-December because the yield would not be substantial. This could affect the next year's wheat crop, he feared.