Wheat support price

The federal government has fixed wheat support price at Rs1,400 per 40kg for the crop 2019-20 and also announced that benefit of the declining oil prices will be passed on to consumers. It is, however, unclear whether a procurement target has been set or not. The purpose of fixing support prices for agricultural commodities is to provide incentives to farmers. The aim is also to ensure availability of foodstuffs at affordable prices and to have surplus produce that can earn foreign exchange. In November last year, the government had decided to fix the minimum support price for the 2019-20 crop at Rs1,365 per 40kg against the food ministry’s recommendation of Rs1,400. The federal government had to review its decision after the Sindh government set the procurement price at Rs1,400, to ensure uniformity in the procurement price throughout the country.

The cost of wheat production has increased in Punjab and Sindh, the main producers of the staple in the country. Farmers were considering switching to other crops where there is sustainable return. So in view of the rising cost of production the government has increased the support price. Now the government will have to ensure sufficient water and electricity supply to farmers so that their output is adequate to meet domestic requirement and some surplus is also available for export. There is the need to pass on the benefit of falling oil prices to growers.

Considering the increasing economic problems which are having their impact on all spheres of life, what is of utmost significance is to keep the masses satisfied by making wheat and wheat flour available at affordable prices. The economic managers should be on guard against the machination of hoarders and profiteers and other vested interests so that a shortage of wheat and wheat flour does not occur like the one that was witnessed a few months ago. Mistakes like allowing the export of the commodity without taking into account domestic consumption should not be repeated. Last year, this error caused havoc in the domestic market, which brought a windfall for unscrupulous elements and also gave the opposition teeth.

Published in The Express Tribune, March 14^th, 2020.

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