March 23, 2003	Sunday	Muharram 19, 1424

KARACHI, March 22: A bumper wheat crop of almost 21 million tons this season is forcing farmers to sell their produce at lower than officially fixed price of Rs300 for 40 kg.

Almost 86 per cent of the farming community of the country is involved in wheat cultivation. An overwhelming majority of them hold less than subsistence level ownership and hence do not have holding capacity. They are forced to sell their wheat at even less than Rs200 for 40 kg quickly to clear their debts with the village money lender.

The government has announced to procure 5.3 million tons of wheat at the officially fixed price from the farmers this season. Out of this 3.5 million tons would be purchased from Punjab and 0.5 million tons from Sindh. PASSCO will procure more than one million tons.

Farmers complain that official procurement is very slow and only big and politically influential farmers manage to sell their wheat. It is still a long way to go for acceleration in the official procurement programme.

The State Bank’s recent quarterly report has taken notice of the farmers predicament. “The most crucial step that farmers can take, either individually or collectively, is to build storage capacity in wheat,” advises the State Bank report. The report says that construction of private sector silos will help the farmers to plan the supply of wheat

in the market, rather being forced to put it all in the market within a short period, creating a temporary supply glut at harvest time.

Silos construction is a highly capital-intensive activity. The State Bank took special measures and instructed the banks to provide the finance to private sector that could be farmers or the flour millers.

But the response is too poor. The SBP report says only 152 borrowers obtained about Rs115 million for this purpose in first half of the current fiscal year. It shows an average lending of 0.8 million per borrower, which is not sufficient for any major silos construction project.