May 2, 2006	Tuesday	Rabi-us-Sani 3, 1427

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LAHORE, May 1: The Punjab government on Monday increased its wheat procurement target from two to three million ton, and pledged to raise it further if the need be.

Chief Minister Chaudhry Pervaiz Elahi took the decision after holding a meeting with the Food department high-ups who briefed him about the latest wheat procurement and market situation.

The chief minister, reiterating the government resolve to continue wheat purchase ‘till the last grain’, said the target would be further raised if the need arose. The government cannot afford wheat price tumbling below the support price, he is quoted as saying.

In pursuance of the official decision, the Punjab Food Department has started making arrangements to purchase had hold more wheat in accordance with the raised target. “The department already has gunny bags for 2.7 million tons,” Food Director Irfan Elahi said, adding there was not much emergency on that front.

He said purchase of extra gunny bags would depend on the pace of wheat arrival. If procurement pace increased in the next week or so, the department had the option of procuring bags from farmers or it could try to buy these from open market, he said.

About additional finances, he said, the Punjab government would naturally arrange whatever money was required for the purchase.

Welcoming the decision, farmers from Punjab said it was never too late, but ideally the Punjab government should have raised the target at least two weeks back and started procurement earlier than it did.

They said the delay in the decision had affected south Punjab growers, most of whom had already sold a bulk of their wheat at much less a price. The growers in central Punjab were now in the process of doing so. Had the Punjab government taken the decision in time, these farmers could have been saved from the loss they incurred, they said.

“But, it is certainly heartening to listen that the government has ultimately woke up to farmers problems,” says an official of the Farmers Associate Pakistan (FAP). He said the wheat growers had been screaming from the roof top since beginning of the harvesting season that the price would crash unless the government entered the market with a huge sum for procurement. But, the government, typically, not only took its time but also kept its cards close to chest and let farmers suffer in the earlier part of the procurement campaign, he said. Had the government announced inflated target in the beginning, it could have saved both its own resources and those of the farmers, he said.

By announcing an increased target earlier, the government could have stabilised market on the higher side and attracted private sector into wheat trade, he said and added that now one must keep his fingers crossed and see how the market behaved, he said.

Majid Abdullah of the Pakistan Flour Mills Association (PFMA) hoped the market would now stabilise around officially announced support price (Rs415 per 40kg). With the start of government purchase, the market had gone up from around Rs370 to Rs400 and it would now go further up, at least to Rs415 per 40kg, if not more, he said.

However, he said the target could be further increased because the private sector might still not come in the market due to very high interest rates. The PFMA requested the government to give private sector some concession on that account, but it did not. Now, it remained to be seen how the private sector reacted to the increased target, he said.