Farmers uncertain as govt fails to announce wheat support price

Uncertainty grips the farmer community, as the government has failed to announce wheat support price for the current Rabi crop, even though the prices of fertilisers and other inputs have more than doubled.
An official source said the Agriculture Policy Institute (API) had estimated an increase in the cost of production of wheat due to rise in input prices and had recommended enhancing the support price to Rs1200 per 40 kg from the last year’s level of Rs950 per maund. However, he said the summary could not be moved as after the devolution of Agriculture Ministry, API was under the control of Ministry of Science and Technology and wheat support price was under the mandate of Ministry of Inter Provincial Coordination. Planning Commission, which is overseeing majority of agriculture issues after the devolution, the source said was opposed to the support price mechanism for the crops as it wanted the market forces to determine the prices of commodities. The support price benchmarks the price of wheat and the government regulates the market by making direct procurements from the farmers.
Talking to Profit, former Agriculture Development Commissioner, Ministry of Agriculture, Dr Qadir Bakhsh Baloch said the announcement of wheat support price gives a relief to the farmers that their good yield would get them good profit otherwise they opt for other profitable crops. “Pakistan has managed to achieve food autarky during the last few years only by timely announcing support prices for important crops.” Usually the wheat support price is announced by September end, as the sowing of the crop starts in October in the rain-fed (barani) areas and in the districts of lower Sindh. Pakistan annually harvests wheat crop on average 8.8 million hectares that yield more than 24 million tonnes of wheat as compared to the country’s annual requirement of 22 million tonnes.
President Agri Forum Pakistan, Ibrahim Mughal said that they have written a letter to the Prime Minister a week back suggesting increase in the wheat support price to Rs1250 per 40 kg. He said an official Farooq Awan of Prime Minister Secretariat informed him that the government was likely to enhance the wheat support price between Rs1100 to Rs1200 per 40 kg within next few days. Currently, the wheat flour is sold between Rs32 to Rs35 per kg. If the price is increased to Rs1200 per 40 kg, there would be an increase of Rs5 per kg in the price of flour. The government had retained the wheat support price during last year to keep the food inflation low, but this year, prices are set to increase as flour mills are demanding an increase in flour prices due to hike in power tariff. Mughal said the increase in price was essential for better yield. He said if the support price was increased to Rs1150 per 40 kg, it would be beneficial in increasing the country’s wheat yield to over 26 million tonnes as compared to last year’s yield of 24.2 million tonnes. Pakistan has already been faced with a urea shortage of 1.2 million tonnes as compared to estimated urea demand of 3 million tones during the Rabi season, which the government plans to meet through imports. The country has annual urea demand of 6.5 million tonnes of urea which can be easily fulfilled by the local fertiliser industry that has the capacity to produce 6.9 million tonnes per annum, provided they get feedstock gas supplies. The annual production for the current year is estimated to be 5 million tonnes with an estimated urea shortage of 1.3 million. The government has already imported 500,000 tonnes of urea during the current year and will incur a cost of $400 million on importing 700,000 tonnes of urea. This will have to provide subsidy of Rs26 billion to the farmers.