Punjab food department facing acute dearth of wheat storage silos

A major segment of the food department employees and officers oppose construction of silos

Rizwan Asif March 30, 2019

LAHORE: Owing to an acute dearth of warehouses at the food department, the Punjab government is currently undergoing a crisis in term of wheat storage. At present, the department - on average - needs to stock 320,000 tons of wheat but it only has a capacity to store 220,000 tons.

According to research conducted by international institutions, if the current situation persists, by 2025, the food department will not be able to stock around 270,000 tons of wheat. Therefore, it is necessary for the Punjab government to create a capacity for storing 200,000 tons of wheat on the state level and build silos by offering concessions to the private sector to stock 100,000 tons of wheat.  A plan for constructing new silos for storing the surplus 100,000 tons of wheat was devised in 2004, however, due to a shortage of funds, management issues, and a general lack of interest among various governments, the plan could not be fully materialised.

Over a period of 15 years, silos with a capacity to store 30,000 tons of wheat had been built in Rawalpindi, but because of neglect, they have been non-functional for over a year. Although the shortage of silos has caused a lot of trouble to the department, a major segment of the food department employees and officers oppose the construction of silos owing to the belief that it will be difficult to keep them operational due to power crisis. The employees, therefore, are of the view that it will be appropriate to construct them in big cities, adding that new warehouses - similar to houses - should be built in rural areas, specifically Southern Punjab, where there is plenty of state-owned land available.

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Per the details provided by the Punjab food department, it annually procures 350,000 - 400,000 tons of wheat, while each year, the department is left with 100,000 to 150,000 tons of old carry-forward stocks of wheat. In 2019, however, the department was left with 360,000 tons of wheat in carry-forward stock while an equal amount of new wheat was procured. As a result, with 720,000 tons of wheat, the department was only left with storage space for 210,000 tons of wheat. The rest was either stocked in private warehouses or in open fields as cereal grass.

Apart from the lack of storage capacity, the food department also has numerous weaknesses in terms of its operations. Owners of different flour mills complain that the department’s field staff mixes sand and pebbles to wheat sacks in order to increase their weight up to three to four kilograms.

The officers and field staff of the Department told The Express Tribune that for the past 20 years, they have been hearing that silos will be built by the government but so far the plan has not been materialised. “Since there is a serious energy crisis in Pakistan, the operational cost of silos is will be very high,” one of the officers said. “Per an average cost estimate, the dumping and taking out of each wheat sack in silos will cost up to Rs4-6.

Stocking wheat in the form of cereal grain or in a house-style warehouse is easy and cost-effective,” he said. According to the documents and records obtained by The Express Tribune, after becoming the Chief Minister of Punjab in 2002, Chaudhry Pervez Elahi, directed the food department to construct silos to stock government wheat in Punjab.

The food department, however, showed progress on the directive for two years. In 2007, some silos were constructed in Rawalpindi but the Punjab Communication & Works Department suddenly raised objections on technical grounds. Finally, in 2010, the silos were made operational again. Within two years, however, they became non-functional.

During his tenure, former PM Nawaz Sharif also promised to construct new silos, after which the food department started work on the project again with the assistance of International Finance Corporation. In 2012, with the help of studies conducted by foreign experts, the government decided to construct silos with a capacity of 50,000 tons in Lahore, Rajanpur, Bahawalnagar, Bahawalpur, Multan, Sahiwal and Muzzafargarh - which means silos with a total of 350,000 tons of storage capacity were planned to be constructed. Moreover, through the construction, the private sector would have been given a subsidy of Rs2,700 every year for wheat storage.

The government officials estimated the cost of silos per site at Rs1 billion. The department summoned a tender but no company came forward to with a proposal. In April 2015, the food department summoned a tender for the construction of silos once again but the effort went in vain once again.

As a result, the then-provincial government asked the World Food Programme for assistance and as a result, a Dutch company accepted the project. In its recommendations, the company wrote that the government should immediately construct storehouses with a storage capacity of one million tons, while the private sector must be directed to construct silos with a storage capacity of two million tons.

Furthermore, the Dutch company proposed to build steel silos at 200 locations in the province, each having a storage capacity of 10,000 tons at an estimated cost of Rs110 million. The company also suggested that the cost of procuring local and foreign machinery will be estimated at Rs150 million, while the price per ton of wheat storage for a year was recommended at Rs2710. In 2017, biding for the silos was carried out at 40 spots but firms only came forward in two places - Bhakkar and Layyah. Currently, these silos are under construction.

The current PTI government is also in favour of constructing these silos and, for the purpose, CM Punjab Sardar Usman Buzdar has constituted a technical committee. However, the project of constructing silos is undergoing delays due to the continuous fluctuation in the value of US dollars against Pakistani Rupees, as well as the absence of stable government policies and uncertainty regarding wheat.]

Another reason for the undue delay is that the food department - which is already facing a shortage of storage houses - will have to sacrifice two houses. This is because, during his tenure, when former CM of Punjab Shehbaz Sharif toured Lahore’s Gulberg and Badami Bagh, he ordered to take away the warehouse projects from the food department to initiate other projects.

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At the time, the provincial government had promised the food department that for the construction of new warehouses, 205 kanals will be allotted in Lahore. The promise was, however, has not been fulfilled to date. Moreover, the department’s old silos in Multan and Faisalabad have been non-functional for a long time.

When approached, the food minister of Punjab, Samiullah Chaudhry, said that it is the government’s responsibility to ensure the protection of public’s food and it is also important to provide quality food to people.

“The public consumes a reasonable amount of flour and, for quality flour, we require high-quality wheat,” he explained. “It is true that the food department’s own warehouses have a low storage capacity and we have to rent private warehouses or store wheat in open spots, but the government is working on a project for the construction of silos under Public-Private partnership and funds will be allocated for this purpose in the coming budget.

Chaudhry, however, added that it is a long-term project and will be completed in different phases.

Speaking on the matter, the central leader of the Pakistan Flour Mills Association, Asim Ahmed Raza, said that since the creation of Pakistan, the standards established at an international level for the purchase of wheat from farmers could not be implemented by our governments and the food department.

Published in The Express Tribune, March 30th, 2019.


audifan | 5 years ago | Reply Largest food exporter on the planet doesn't have the govt control agriculture. USA govt doesn't dictate prices, own storage silos or any of the bureaucratic nonsense that we do. USA farmers determine what to plant, when to plant, and enjoy the benefits or downsides of making decisions. Free market works.
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