Political rivalry among federal and provincial governments have jeopardised the availability of affordable food for masses. Federal government has announced wheat support price of Rs1,050 per maund for the next wheat crop and Punjab government is likely to follow suit to save its vote bank for the forthcoming election.
Economic managers in the country have ignored the fact that Pakistan has been getting bumper wheat crops since three seasons. The country has some 10 million tonnes of wheat stocks available against the national requirement of 4.5 million tonnes. Food departments’ go-downs still hold 2009’s wheat crop grains on which the government has paid millions of rupees on account of bank markup and incidental charges.
Simple arithmetic shows that even after fulfilling national requirement, the country will have some 5.5 million tonnes of surplus wheat. The estimated value – at the rate of Rs950 per maund – of available wheat stock is Rs237.50 billion, which was borrowed from commercial banks by federal and provincial governments.
Conservative estimates suggest that government has paid around Rs700 million on account of incidental charges at the rate of Rs100 per maund. In addition, government has paid over Rs100 billion to various banks on account of mark-up against borrowed money.
Economic experts point out that the country is constantly paying the price of contradictory and flawed economic policies. They point out that in 2008 federal government gave jump of over 52 per cent to wheat support price by increasing its price from Rs625 to Rs950 per maund, which resulted in that bread (roti) prices were reportedly increased from Rs2 to Rs6. Meanwhile, provincial government introduced politically motivated ‘Sasti Roti’ scheme to arrest bread price that attracted huge criticism from opposition and media.
Historic price figures show that 52 per cent increase in wheat support price inflated flour price by 23 per cent, which gave tough time to Punjab government. It had to take over the control of nearly 72 mills in the province, as flour millers were reluctant to reduce wheat flour price. The whole provincial machinery was witnessed in controlling the price of wheat flour and sasti roti.
Economic pundits have once again predicted that by increasing wheat support price, government has once again let the genie out of the bottle. They believed that though wheat support price increase would help political leadership in gaining popularity in rural areas, but it would bring skyrocket inflation in rural and urban areas alike.
They underscore that latest increase in wheat support price has increased its price even from international markets, which will not only stop wheat products exports but also encourage smuggling. Industry experts indicate that flour consumption has already shrunk by 20 per cent as bakery and confectionary products consumption has dropped remarkably, during recent years. Flour millers estimate that a 20-kilogram wheat flour bag will touch Rs700 when new crop will hit markets.
Economic pundits suggest that instead of increasing commodity prices, government should focus on controlling prices of agriculture inputs.. Despite having surplus wheat stock in the country, they underline, neither Pakistan could export wheat or wheat products, nor could it provide affordable food to masses. And this is only because of flawed economic policies that may backfire for ruling parties in the forthcoming general elections, they concluded.
RS.1050 price of wheat for per 40kg is not much for formers in todays history because if we see the other expenses which use for wheat crop then we can relize that its not enough.
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