Nearly two million tonnes of wheat in Punjab government stocks carried forward from previous years has become a heavy burden on the provincial kitty, as it has not only lost its nutritional and monetary value owing to a lack of proper storage capacity but has also become an “unattractive” commodity for flour millers, Pakistan Today has learnt.
Every year, the Punjab government’s wheat procurement campaign starts in mid-April and continues for the next 45 days during which huge quantities of wheat are purchased to ensure proper supply of wheat and flour to the people. The government gets loans from a consortium of banks on an interest rate of 16 percent to stock large quantities of wheat, which is then issued to flour mills on subsidised rates. Presently, the government has more than five million tonnes of wheat in its stock, with 3.2 million tonnes procured this year alone, while the rest carried over from previous years.
The government has been purchasing wheat from farmers at a support price of Rs 950 per 40 kilogrammes since 2009, the year when the government procured 5.78 million tonnes to avoid flour crises of previous years. According to sources, the government bears an additional Rs 5,000 per tonne, as keeping cost, which includes salaries, transportation, godowns and tarpaulins. “The Punjab government has incurred a loan of more than Rs 150 billion to procure wheat with a mark-up of 16 percent while nearly two million tonnes of wheat from previous years is still in government stock. Around 80 percent of the keeping cost is bank interest,” sources said adding that Rs 1,150 per 40 kilogrammes wheat procured by the government from farmers is then given to flour millers at Rs 1,050, with the government giving a subsidy of Rs 100 per 40 kilogrammes.
Interestingly, they added, the government has a capacity to store only around 2.8 million tonnes of wheat while the rest keeps lying outdoors in covers always vulnerable to heat and moisture, the two major factors affecting the nutrition and quality of wheat. Dr Nawaz, an agriculture researcher, said that the normal rate of moisture in wheat is 12 percent above which the moisture brings a change in the chemical composition of wheat.
“The other affect comes from the pest attack, which also severely affects the quality of wheat. If properly preserved the quality of wheat is not affected,” he added. A senior government official, seeking anonymity, said that last year, the government offered to sell open stock at Rs 50 lesser than the godown stock to release the large quantities in store. Recently, the flour millers again expressed their reservations on getting wheat from the old stock for Ramadan package, a demand which the government accepted and consented to release fresh wheat considering the holy month.
A flour miller said that the government has stocked large quantities of wheat from previous years not realising that the old stock has lost its nutritional value. “White flour made out of old wheat is not of good quality. The authorities concerned always force the millers to purchase old stock in order to get fresh wheat. If given a choice no miller will ever prefer to buy old wheat,” he added.
2 million tonnes of wheat wasted
