Agriculturalists advocate free wheat market

Say support price drains billions of rupees, only benefits banks, govt and mills

LAHORE:

Agriculturalists and businessmen have advocated the government to introduce a free market mechanism for wheat crop to end confusion and enable farmers to fetch a fair price for their produce.

Talking to The Express Tribune, Federation of Pakistan Chambers of Commerce and Industry's (FPCCI) Central Standing Committee on Agriculture Chairman Ahmad Jawad recalled that a few days ago the food department apprised the Punjab government that the support price of Rs3,000 per maund (40 kg) was viable, which would stabilise flour prices in the province.

"If this happens, farmers will take to the streets again. I suggest that the Punjab government must refrain from announcing an unviable support price for the upcoming wheat crop," he stressed.

He said that the provincial government must understand that the wheat support price was a costly subsidy, which drained hundreds of billions of rupees annually. Introduced in 1968, "this system benefits banks, the government, flour mills and everyone but the average farmer".

He considered the wheat support price a bigger problem than people could realise. The concept behind wheat procurement is that the government buys the staple crop from farmers at a set price, which is higher than what they will get in the market, encouraging them to continue to grow the strategically important crop.

However, the problem is that provincial governments borrow heavily from commercial banks to fund these procurement operations.

The agricultural committee chief urged the Punjab government to provide seeds and fertilisers at competitive prices to small farmers having landholdings up to 10 acres. It will serve as an incentive to enhance wheat harvest to feed the growing population rather than announcing an unrealistic support price.

He was of the view that strengthening the Ministry of National Food Security and Research (MNFSR) was another critical area that required urgent action.

Despite agriculture being a provincial subject, the MNFSR has a crucial role, particularly in managing imports and exports, including wheat. Recent crises in the wheat market have highlighted the ministry's limited capacity, which has had dire consequences for the domestic producers and consumers.

"Strengthening the ministry will ensure better management of critical agricultural resources and more stable markets," emphasised Jawad.

Pakistan's agricultural sector holds enormous growth potential but is hampered by inefficiencies, an outdated product mix and high losses during transport, storage and marketing. However, both domestic and international technologies are available that could quickly improve productivity.