‘Middlemen, millers made Rs250b by exploiting farmers’
Middlemen and flour mills have raked in around Rs250 billion in a year by buying wheat from farmers at a cheaper rate and selling flour to consumers at an exorbitant price, claimed Sindh Abadgar Board (SAB), a farmers’ lobbying group, on Sunday.
SAB vice-president Mahmood Nawaz Shah, chairing the group’s meeting in Hyderabad on Sunday, said middlemen and mills bought wheat from growers at a maximum rate of Rs35 per kilogramme, whereas flour was being sold for up to Rs80 per kg in the market.
Claiming that transport and processing costs were only about Rs15 per kg, Shah calculated that flour should not be sold for more than Rs50 per kg. “The strategy to keep the price of farmers’ commodity low encourages hoarders to buy wheat in large quantities and profiteer at the cost of consumers and growers,” he noted.
Rejecting the rate of Rs1,650 per 40kg for wheat, as fixed by the Centre, he demanded it be raised to Rs2,000 per 40kg - the price suggested by the Sindh government too. He pointed out that the rates proposed by the other provincial governments had also been higher than that set by the federal government and urged the Ministry of National Food Security to recommend the Economic Coordination Committee (ECC) fix the rate at Rs2,000 per 40kg.
He recalled that the support price of wheat was Rs1,300 in 2014, adding that with a 10 per cent annual rise, the current support price should surpass the Rs2,000 mark.
“The problem of wheat import can only be resolved by fixing realistic prices of wheat to prevent financial losses for farmers,” Shah maintained.
The meeting also expressed concern over the declining production of cotton, which had dropped to just eight million bales from a peak of 14.8 million bales a few years ago.
The SAB warned the federal and Sindh governments that without immediate measures, the cotton crop would be replaced by paddy, sugarcane and maize crops in a detrimental shift. This would put further strain on water and would reduce crop diversity, negatively affecting the small and medium-sized business of ginning as well, the board observed.
It suggested that new cotton seeds be imported on priority basis, while also revisiting the duty-free import of cotton from countries where the crop is heavily subsidised. “As a long-term strategy, imported cotton will not be beneficial, sustainable or cost-effective,” the board contended.
The meeting also condemned illegal deductions in paddy crops in northern Sindh, where harvesting had started. According to the SAB, the international standards of acceptable moisture had not been benchmarked and notified, allowing middlemen and millers to exploit farmers.
Published in The Express Tribune, November 9th, 2020.