Wheat support price

The Sindh government has set the wheat support price at Rs4,000 per 40kg bag, hoping that the price point will be enough to encourage farmers to grow more wheat to replace the crops lost to the floods. The provincial government has also said the move is meant to avoid “a famine-like situation” due to supply shortages or regional gaps. While the price is significantly higher than the federal government’s support price proposal — Rs3,000 — Sindh government officials have pointed out that it is still lower than what was being paid for imported wheat — as much as Rs9,000. This, coupled with the fact that all the provinces will see wheat yields falling in the short term as an after-effect of the floods, means that imports are almost certain to be required, and the high support price could actually help reduce the import bill for the provincial government, and save precious dollars for the federal government.

Discussions in the National Assembly last week estimated that the area under wheat cultivation would reduce by 20 per cent, and even that may be worsened by the fact that it could take up to two months for the floodwater to recede and work on rehabilitating fields to begin. And while Pakistan Agricultural Storage and Services Corporation claims that despite losses, it still has ample stock and no wheat shortage expected, Prime Minister Shehbaz Sharif and several other government officials have admitted in international communications that the country is in the middle of a “food shortage” and needs all the help it can get.

Indeed, food prices have been skyrocketing due to the confluence of lost crops and damaged supply routes — the International Rescue Committee estimates that about 3.6 million acres of crops have been lost, while a third of the country is still underwater, and roads and rail lines in many other areas also need repairs due to flood damage. While the effort to ensure future price and supply stability is commendable, we need more from the provinces and Islamabad to bring the maddening food prices of today under control.

Published in The Express Tribune, September 14^th, 2022.

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