Deadline approaching: PASSCO only halfway through wheat purchase target

Farmers prefer to sell commodity to provinces that offer better prices.

Anwer Sumra May 30, 2014
Lucrative: Rs1,250 per 40 kg, is the price being offered by Sindh and Balochistan to wheat farmers compared to federal govt’s support price of Rs1,200. PHOTO: INP/FILE

LAHORE: The Pakistan Agriculture Storage and Services Corporation (Passco), a state-run grain buying agency, is falling short of the purchase target of 1.6 million tons of wheat in three provinces – Punjab, Sindh and Balochistan – this season, officials say.

Although Passco started the grain buying drive in the last week of March in Sindh and at the end of April in Punjab, it has so far purchased only 895,000 tons and is nowhere near the 1.6 million target. It is paying to farmers the support price set by the government at Rs1,200 per 40 kg.

“As we are far from the target, the management has decided to extend the procurement campaign until June 30, unlike the past when it hit the target by mid-June,” said an official but requested anonymity.

In March, the federal government had asked Passco to procure 1.6 million tons at Rs1,200 per 40 kg from the upcoming wheat crop from Punjab, Sindh and Balochistan. For that purpose, Passco took Rs53 billion in loans from scheduled banks.

In the middle of the campaign, the Sindh government increased the support price from Rs1,200 to Rs1,250, encouraging farmers to sell their produce to the food department of the province.

The food department allowed Passco to buy wheat from four tehsils, but it failed to reach the target because of the price difference, the official said.

In Punjab, the food department set the procurement target in the range of 3.5 to 4 million tons and has so far purchased about 3.6 million tons with ease.

“Punjab allowed Passco to purchase wheat from 15 tehsils, but growers preferred to sell to private buyers as they offered higher prices,” the official said.

Like Sindh, the Balochistan government also increased wheat price to Rs1,250, prompting the growers to sell the commodity to the provincial food department and leaving Passco in a fix over how to meet the target in the two tehsils designated by the province, the official said.

“Market players fear that in the coming days wheat and flour prices will increase over the developing situation and hoarders are stocking a huge quantity to make a quick buck,” said in charge of a Passco district office.

“Hoarders and flour mills have purchased big volumes keeping in view the price surge last year that took rates to Rs1,500 per 40 kg,” he added.

The official pointed out that for the first time a civil servant was heading Passco as managing director and if he failed to achieve the goal it would set a bad precedent. It would also give an edge to retired and serving officers of armed forces, who had led the organisation in the past, he said.

Published in The Express Tribune, May 31st, 2014.

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