THE government devised a tool for fixing support prices in the early 1950s. It was limited to main food grains, namely, wheat and rice, with the dual purpose of ensuring reasonable prices to the growers to provide them incentives to produce more and to ensure supply of wheat to the domestic consumers and rice for export. The support price was backed up by procurement but being limited in scope could not be of much help either to the producers or the consumers. In order to streamline and expand the commodity programmes, the Agricultural Prices Commission was established to cover more commodities.
Now, the commodities subjected to such programmes are wheat, rice, cotton, oilseeds, sugarcane, maize, potato, onion and gram. In the case of rice, cotton, oilseeds, varietals, price fixation is also done such as in the case of Basmati Irri, clean and paddy rice, Desi seed cotton and Desi lint cotton, as well as marketable staple varieties (both seed cotton and lint cotton).
Non-traditional oilseeds also figure prominently covering soyabean, sunflower and safflower. Sugarcane prices are fixed province-wise.
Although the methodology of fixation of support price has been much improved over time, it still leaves much to be desired for a variety of reasons; the main one being unsatisfactory and insufficient data. However, one major drawback has since been overcome. It is the announcement of support prices on time, that is, much before the sowing period. As for the quality of the declared support prices, it still needs to be improved through bringing an objective change on the basis of their cost of production which varies with the area and the farmer.
The method of computation also needs to be as realistic as possible. Cost of progressive farmer (being low) or that of subsistence (being high) or of average farmer and the area-wise differences should be taken into account.
In the past, many deliberations and exercises were undertaken by local and foreign experts and fixation of representative price is done more objectively and scientifically. Still it lacks complete consensus.
Government procurement: Fixation of support prices is not an end in itself. It is only a means to adequate qualities to be procured at the fixed prices. Most often procurement is not done in an objective manner. Both the sellers (producers) and purchasers (government machinery) are to be blamed.
Firstly procurement centres are not established at convenient places and in adequate numbers and secondly, the owners of the produce do not care to offer reasonable quality as required Recently, the payment method to the seller has been streamlined. Still there are complaints of delay in payment and excessive deduction for quality and weight.
Another important drawback in the entire procurement system is the participation of the commission agents and wholesalers who are not at all growers and take undue advantage. It is very much in the knowledge of the government officials operating at the procurement centres. They are penalized for not fulfilling the quality, or for under procurement. Recently, the Food Department officials concerned are reported to have been transferred, or suspended.
Procurement by mills: Unlike wheat and rice where procurement is effected by the government and autonomous organization, that of other commodities is done by the sugar mills for sugarcane, seed cotton by the ginning factories, edible oilseeds by the Ghee Corporation, potato, onion and gram by Pakistan Agricultural Supplies and Storage Corporation (Passco). There are complaints that procurement agencies do not do justice to the sellers as required.
Except for sugarcane and oilseeds, there are no satisfactory arrangements of the storage of produce purchased. A decade back Passco and an agency — known as the Agricultural Marketing and Storage Corp has since been disbanded — could not rise to the occasion and were responsible for heavy losses to the exchequer. Even a more experienced and effective organization like Passco often failed in its performance.
In the case of seed cotton, sugarcane and oilseed, the picture is not all rosy. Sugar mills, oilseed mills, and ginning factories create various difficulties in purchasing the produce and there are no arrangements to remove them for the benefit of seller.
In the case of potato and onion the procurement arrangements are made on an ad hoc basis and at times are not made on time. As a result, the producers do not get the desired benefit of selling to the government-established procurement centres and have to sell their produce at lower price in the open market where transactions are smooth and commercially sound.
Evaluation and suggestions: The above exposition would show that support price and procurement programmes are a right step for boosting agricultural production in the country. But their implementation has a number of drawbacks. Consequently, the objectives of the programme are not achieved.
It is, therefore, suggested that the entire system should be overhauled and made foolproof. For this purpose an expert committee may be appointed giving it a specific charter to accomplish the job. The proposed committee should be composed of agriculturalists of repute, marketing experts, the government officers concerned and farmers, both big and small.
