May 29, 2007

 

Pakistan's ban on wheat export could hurt farmers

 

 

The suspension on wheat exports by Pakistan will not only affect exporters but the farmers as well.

 

The ban of exports has pulled down wheat prices in the local market, forcing the farming community to sell their produce to the Pakistan Agriculture Storage and Supplies Corporation (Passco) and provincial food departments.

 

The two buyers were procuring the commodity to achieve their official targets set by the federal government, exporters and growers said.

 

Pakistan's decision of banning wheat exports has pulled prices below the support price of Rs425 (US$6.99) per 40 kilograms. However, millers did not confirm if they would reduce the prices of flour.

 

The U-turn on the part of government in wheat export policy came because the Passco, the provincial food departments and millers were facing difficulties in achieving their procurement targets, farmer Rabia Sultan said.

 

Increase in flour prices was due to inherent flaws in the market and the move to bring these down was only aimed at pleasing 30 million people in the urban area at the expense of 70 million farming community, she added.

 

Sultan lamented that various lobbies behind the banning will make the country a net importer again and was made by procurement agencies who will "pocket billions of rupees in one-and-a-half month procurement campaign."

 

The grower from Muzaffargarh, a district in the south of Punjab province, says the farming community was always at the receiving end and never got fixed price of the commodity, as they were still receiving US$180 per tonne against international market rate of US$220 per tonne.

 

On the other hand, the food departments and millers blame the exporters for hoarding and dumping of the commodity, which have ultimately created artificial shortage in the local market, leading to suspension of exports.

 

A leading wheat exporter of Karachi said Pakistan should now seize the opportunity to enter the exports as US and Australia is expecting low production due to drought.

 

Another exporter said the government did not come up with complete homework for handling the surplus produce and could not gear up procurement agencies to meet their targets.

 

The Ministry of Food, Agriculture and Livestock, which was still sticking to its outdated framework of 1973, overestimated the size of the crop, said former secretary food Dr Zafar Altaf.

 

He said there was not enough commodity in the market as prices never fell below the fixed rate of Rs425 per 40kg.

 

Agri Forum Chairman Mohamed Ibrahim Mughal said there were a few players who were manipulating the commodity markets as policymakers in Islamabad are taking decisions unilaterally without consulting stakeholders.

 

Food secretary Mohamed Ismail Qureshi said the government had to create a balance between the rights of growers and consumers.

 

Defending the government decision of allowing wheat exports, Qureshi said the decision was for the better interest of the growers and got wheat prices above the fixed prices for the first time.

 

Rejecting the claim that wheat export suspension was aimed at meeting the procurement targets, the official said they were already on target and there was and exports were suspended just to stabilise the prices of wheat in the domestic market.