WHEAT procurement is the most important appointment on Punjab’s annual calendar of agriculture and more often than not, it is an unhappy event. Procurement drives in the province have either failed or succeeded at the cost of farmer’s welfare every time except once in the last five years.
Success came in the year 1999-2000 on the crest of a produce of unprecedented plenty. Farmers were satisfied with even if the system deprived them of a raise in the purchase price because of high per acre yield. They did not get a fair and deserved deal but yield made up their losses of previous years and left them marginal surplus money to finance the next crop. It has been down hill for both the Food Department and the farmers of Punjab since then.
The provincial administration used all varieties of unpleasant tactics last year against farmers to meet its wheat procurement target. Protests in some area, against the government’s high handedness were sternly dealt with. Inter- provincial and inter-district movement of the commodity was disallowed to facilitate procurement.
These measures were ostensibly taken to counter smuggling and hoarding. They were needed because the administration is responsible for food security of the people of the province and for countering smuggling through inter-province transportation of wheat. Hoarding had to be discouraged because this is the first step towards inflation and speculative increase in the price of the commodity. But positive quests crossed the line and farmers were virtually treated like characters wanted by the law.
The campaign against hoarding actually forced farmers, most of them small or of middle level growers, to part with their sweat and toil of the season to fill and boost badly managed and low stocks of the government. While governments are expected, indeed it is their duty to look after the population, the administration acted harshly and unwisely. One segment was deprived of its due share to feed the rest and to prove welfare orientation of the rulers. Farmers were fleeced in the name of food security.
This was a far cry from the commitment made by the new, indeed the fist Chief Executive, General Pervez Musharraf who had pledged to protect the interests of small farmers in his seven point agenda on taking over the reigns of the government and later issued specific directive to provincial governments and federal finance minister to develop such a farm tax strategy that would protect the interest of small farmers’
Presiding over a high level meeting on agriculture income tax in Islamabad on May 29, 2000, he stressed that all agriculture income groups should pay their taxes and emphasized that small farmers were not unduly burdened. Neither end has been met: big land owners rule the roost and small farmers continue to be exploited, not merely by market forces and middlemen but by the very authorities that are required to counter activities undermining small farmers.
Some of the measures government taken to achieve procurement targets tend to be repressive and fall in the category of extortion.
This year, the administration resorted to what it called “aggressive marketing” which is a fancy expression for forcing farmers to part with the crop they had kept for the yearly food needs of the family and seed for the next crop. Wheat movement was intercepted to pursue procurement agenda. This was daylight robbery, merciless official skinning of the poorer members of the farming community.
The federal government intervened and instructed provincial authorities to refrain from aggressive marketing but Punjab, having succeeded in buying only about 2.5 million tons of a modest target of 3.5 million tons, is still endeavouring to procure another about one million tons to build stocks. Even that end looks highly elusive in view of relatively low crop and high price of wheat in the market in comparison with the official rate. The only possibility of managing the target is deployment of strong arm tactics. That would be even more deplorable than what has happened so far.
The attitude is regrettable and smacks of lack of not just sympathy for poor farmers but also evidence of unwillingness in the administration to explore the obvious. There is just no reason for Punjab’s failure to procure whatever quantity it fixes as target. It can be done quite easily provided the government is willing to offer a reasonable bargain to farmers. Owners of small tracts of land hold the key. But the government has to make a sincere effort.
Punjab has about 90 per cent small farmers cultivating about 36 per cent of the land; rest of the arable land belongs to a minority comprising feudal barons. Small holdings are up to 25 acres. Farmers with bare minimum land cannot serve the government’s procurement purpose due to their limited produce but the rest can be engaged by the government to ensure that the required quantity is available without much ado.
Procurement needs to be managed in a different, imaginative fair manner. Instead of pressurizing farmers to sell their crop, often at a rate lower than what the market offers-this invariably happens when the crop size is lower than expectations or requirements, the administration can form a kind of consortium of farmers and offer itself as a regular customer of their crop. Small farmers are always short of cash and that is where the Food Department should enter the scene.
Public and private sector banks and financial institutions that have made a strong presence in the agriculture sector with loan facilities are mostly if not wholly committed to serving affluent members of the farming community; they are guided by the need to ensure viability of their transactions. Small farmers have no access to them and in any case the proposition of loans on interest basis is not affordable for them.
Nevertheless, they are ultimately constrained to turn to loans in the form of advance from middle men. Farmers go for this arrangement because middlemen provide the facility at their doorsteps. The government can replace loan sharks whose advances have to be cleared with repayment invariably heavier than interest rates of banks.
The government should evolve a system of interest free loans for this group Of farmers; repayment would be guaranteed because crop would be sold to the Food Department. These loans would be small, mostly no more than Rs5,000 for a crop. However, farmers would need to be assured that in case of the market rate rising above the official rate, payment would be adjusted accordingly. They would, in short, be assured that the deal would be equitable and in their best interests.
Such a system would place procurement on an organized and orderly footing and contribute significantly towards alleviating poverty which is billed as a corner stone of the present regimes policy. This procurement system would turn small farmers in to an asset whereas they are a liability at present because of their low yield. This would provide badly needed relief to a segment of farming community that is being pushed towards deeper poverty each day because of spiralling inflation, particularly as they do not get the best price for their produce.
Given the right incentive, this segment can be relied on for increasing the output from their lands. What they require is timely and burden free financial support for their crops and assured sale of produce. Once that is available, there is every reason to hope that they would double their efforts for producing more. Support for small farmers should thus help boost productivity of the agriculture sector too which, going by declared aims of the government, is the official agenda for the farming sector.
WHEAT procurement is the most important appointment on Punjab’s annual calendar of agriculture and more often than not, it is an unhappy event. Procurement drives in the province have either failed or succeeded at the cost of farmer’s welfare every time except once in the last five years.
