In a recent interview, the Chairman of the Agricultural Prices and Policy Commission (APCOM), explained concept, rationale and objectives of the price fixation. Fixation means obsession and does not mean setting prices.

Although he tried to base his case on ‘facts’, a recent report based on field surveys, conducted by APPCOM itself, in randomly selected areas of Punjab and Sindh, tell a different story. The information relates to the year 1997-98 when the support price as announced by the government was Rs240/40 kgs. That the report is rather belated, by five years, is another matter. This is an excellent piece of analysis, although the conclusions drawn by APPCOM are self-serving so as to support its bias in favour of the support prices.

The survey is based on a sample, limited to 16 Tehsils in Punjab and 6 tehsils, known as talukas in Sindh. These cover 79 villages in Punjab and 27 in Sindh. Inqilab-91 variety of wheat is the most popular in Punjab, sown over 75 per cent area. But in Sindh it does not enjoy as much popularity, with only 24 per cent area devoted to this variety. Marketable surplus was 55 per cent of the total production in Punjab against 42 per cent in Sindh. Interesting part of the survey is that a very small percentage of farmers sell their marketable surplus of wheat at the procurement centres (PCs), established by the government to buy at the support price.Seventy-four per cent respondents in Punjab sold their surplus either at the village or the ‘mandi’ Only 21 per cent farmers sold their crop at the PCs. Comparable figures for Sindh are just about the same as far as the PCs are concerned. In Punjab, 30 per cent of the marketable surplus was sold by 15 per cent of the farmers at the PCs. As for Sindh, the figures were 38 per cent and 21 per cent respectively.

Tables below show some more details.

Table 1 above would show that more wheat was sold in Punjab at the village level than in Sindh (54 against 38 per cent). On the other hand Sindh sold more wheat at mandi level (24 vs 16 per cent). Thirty-eight per cent more farmers in Sindh as opposed to 30 per cent in Punjab used PCs.

Tenants who are landless did not or perhaps could not use the PCs. Owner - cum-tenant used them the most in Sindh, i.e. 85 per cent. In Punjab land tenure did not seem to make much difference to the marketing outlet.

In terms of the extent of the ownership, poorer farmers used the PCs the least, both in Punjab and Sindh. Eighty-one per cent large Punjab farmers and 84 per cent Sindh farmers used the PCs. This negates the claim on behalf of the APCOM that the support price helps the poor or the vulnerable.

Table 2 would show that the farmer got a higher price both at village and the mandi outlets than he received at the PCs. That he received precise amount of the support price at the PCs is a myth, which only APCOM would like to believe. At village and mandi level Punjab farmer got more than his counter part in Sindh. Tenant sold nothing at the PCs but he got a price comparable to the other two categories at village and mandi outlets. In terms of farm size, there is not much difference as to the price each category obtained either at village or at mandi level.

In terms of volume, in Sindh 62 per cent was sold at village and ‘mandi’ level and 38 per cent at PCs. In terms of land tenure (owner, owner-cum-tenant and tenant) no tenant sold wheat at PCs. Owner-cum-tenant used the PCs the most, i.e. 85 per cent; 37 per cent owners sold wheat at the PCs. So much for the poor farmer purporting to be supported with price ‘fixation’.

The comparable figures in Punjab according to land tenure present a slightly different picture. There, 23 per cent tenants sold at the PCs as against 33 per cent owners and 27 per cent owner-cum-tenants. Again large majority of farmers, irrespective of the land tenure, sold at village and ‘mandi’ level, with owners selling 67 per cent, owner-cum-tenant 73 per cent and tenant 77 per cent of the surplus.

Similar results of support price bias in favour of the big landowners are manifest in the farm size. Only 19 per cent Punjab farmers owning less than 12.5 acres sold at the PCs as against 27 per cent for 12.5 to 25 acres category, 28 per cent for 25 to 50 acres and 36 per cent for 50 acres and above category. On an overall basis 15 per cent of the farmers in Punjab sold at the PCs. The figures are just about the same irrespective of the farm size or the land tenure.

Another interesting feature that emerges from the analysis is the prices. Farmer receives more prices at village and ‘mandi’ market than at the PCs. The figures for Punjab are Rs. 258 (village), Rs. 272 (‘mandi’) and Rs. 240 (PCs). The survey also indicates that the farmers with larger farm size sell larger quantities and receive relatively higher prices.

Ironically APCOM has concluded that the farmer in Punjab incurred a loss of Rs9/40 kgs by selling wheat at the PCs in view of his higher cost of production. Incidentally the basis of calculating cost is heavily loaded with an intrinsic bias of the APCOM in trying to sustain a failed policy of price ‘fixation’. Sindh presented a more balanced picture because the variation in price received by the farmers was much less. The three prices for village, ‘mandi’ and PCs was Rs241, 251 and Rs 240 respectively. It suggests that the village and ‘mandi’ market in Sindh is not as well developed as in Punjab and is therefore exploitative of the farmer.

The survey also examines the marketing by category on the basis of productivity level and management. In terms of productivity the largest number of farmers who sell at the PCs fall in the middle. The farmers with the lowest productivity sell the least that is 4 per cent of their surplus at PCs. Higher productivity varies directly with the size of the farm.

Data on management basis convey almost a similar conclusion, with progressive farmers selling a higher percentage than the average farmer. Traditional farmer who ought to be less productive and less rich in terms of ownership sells a lower percentage at the PCs.

The survey perpetuates the myth that the farmer receives the exact support price at the PCs. A smaller survey in 1999 conducted by APCOM as well as the anecdotal evidence strongly suggests that the farmer gets a much lower than the support price. The price that he gets irrespective of the claims depends on demand and supply. If movement of wheat is restricted under 144 CrPC, as is typical in Punjab to coincide with the wheat crop, and the prices crash, the farmer is likely to get much less. Besides PCs have an informal network of middlemen through whom the food inspectors buy from the farmers.

Interesting conclusion yielded by the survey and printed by APCOM without noticing the irony in its support of procurement price is that ‘selling of wheat at support prices was not an economic proposition as farmers were unable to recoup their cost of production.’ Similarly, farmers selling wheat in the market were, by and large, able to recover their cost of production and marketing. APCOM has drawn a totally illogical and untenable inference. Rather than admitting the failure of its policy it recommends ‘farmers must recover the variable cost in order to continue in business.’ APCOM would do Pakistan’s agriculture a great favour if it went out of business and concentrated its talent and effort on doing some valuable research like the present survey report.

APCOM is performing a negative roll by persisting with its price support policy while admitting that in Punjab the farmer incurs a loss by selling at the PCs. PCs only disrupt if not completely destroy the emerging private marketing in this important commodity. APCOM is in the wrong business trying to sell support prices in an environment of globalization and market economy. The survey in question contradicts the pet assumptions on which the entire edifice of support price structure is based.

Opinion

Editorial

Doctor attacked
09 Jun, 2026

Doctor attacked

AN act of reprehensible violence has shaken the medical community. On Saturday, an employee of the Provincial Civil...
AJK flare-up
09 Jun, 2026

AJK flare-up

MATTERS have worsened in the stand-off between the Azad Kashmir government and the Joint Awami Action Committee,...
Fault lines
09 Jun, 2026

Fault lines

THE April 8 ceasefire that halted hostilities between Israel and Iran has encountered its most serious test yet....
Soft on traders
08 Jun, 2026

Soft on traders

THE Fixed Tax Asaan Scheme for traders with an annual turnover of up to Rs200m has been designed as a ‘pragmatic...
Ceasefire in name
Updated 08 Jun, 2026

Ceasefire in name

Both sides accuse the other of violating the truce that was supposed to halt the conflict in April, yet neither appears willing to abandon negotiations altogether.
Damaged childhoods
08 Jun, 2026

Damaged childhoods

CHILD abuse is so prevalent that the UN ranked Pakistan as the least safe country for children. Even so, more than...