LAHORE, April 21: The government's decision to bear freight charges for wheat procured and ban on inter-district movement of wheat has confirmed reports that Punjab's wheat procurement drive was facing a tough and unequal challenge from private buyers.
The administration has also disallowed purchase of wheat by buyers who do have licence for the business, Chief Minister Pervez Elahi vowing to stop them 'at any cost', a declaration that further authenticates reports that private sector groups and individuals had established a decisive edge of the administration's procurement efforts.
The seven-rupee transportation payment per bag of 40 maunds plus Rs1.25 handling charges for the same quantity has raised the official public sector price from Rs350 per 40 maund to Rs357.25, but even that may not counter the private sector because the price it is offering ranges from Rs365 to Rs375 to farmers.
There is no denying the fact that the provincial authorities are bending themselves backwards to meet their procurement target to ensure that there is no shortage of flour in the coming months and politically win over farmers but its measures suffer from built in disadvantages and the growers understandable preference for a better bargain.
The handling charges were already there but officials accustomed to exploiting farmers reportedly pocket the amount themselves that comes to a reasonable packet over a day's procurement. In this backdrop, farmers are bound to have misgivings about the payment of transportation charges too.
Another constraint for the officials is rules and regulations that require that payments be channelled through National Bank, while private sector buyers move around with ready cash and ability to instantly settle bargains. The farmers are obviously more comfortable with at the spot cash payment.
Further, while transportation charges are an incentive, private sector buyers pick the grain from the points regarded as suitable by growers whereas wheat sold to the provincial administration needs to be delivered to a procurement centre.
The additional facility offered by the private sector saves growers time and labour and is hence welcomed by them. Further, weighing of the crop is to the farmer's satisfaction.
The Punjab government is to procure 3.5 tons of wheat, while Passco has a target of 1.4m tons procurement. Passco is also finding the going hard in meeting the target and information provided by farmers, agriculture sector organizations and even government officials suggests that the private sector challenge is formidable and difficult to beat.
But the provincial government, which made a determined effort to procure wheat from farmers at the right price last year too, is undaunted and exploring all possibilities for obtaining the required quantity of wheat. Chief Minister Pervez Elahi has this time instructed that ore procurement centres be opened to facilitate farmers access to the centres; Passco is doing likewise.
The decision to disallow buyers not holding licenses is not difficult to circumvent for the private sector because this accords licence holders buyers a plus point that they can cash from groups and individuals pushed out of the procurement field due to this hurdle. The later, mostly smugglers, may indeed be willing to up the price to obtain the quantity they require for serving 'guaranteed sales'.
