LAHORE, July 21: The support prices for pulses announced by the federal government are lower than what brokers (arrhti) paid most farmers during the last harvesting season of these crops, according to a study conducted by a rights group.

The federal cabinet’s Economic Coordination Committee (ECC) set the support prices a few days ago. The support price for gram (chana) was fixed at Rs750 per 40kg, for moong Rs1,200 per 40kg and for maash Rs1,300 per 40kg. The government did not set the support price for masoor, the production of which is more than maash besides being the one of the four most important and widely consumed pulses, says the study by The Network for Consumer Protection.

The study was conducted in the major pulse producing districts of Bhakkar and Narowal (almost half of the country’s gram production and one third of moong comes from Bhakkar while Narowal produces one third of maash and a quarter of masoor).

The support price, also called intervention price, is considered as a government measure to stop brokers from manipulating the market in their favour and forcing the farmers to sell their produce at unfairly low prices. Support price set by the government is a kind of guarantee that the commodity will not be bought from the farmers at a lower price than this. This is supposed to assure farmers of a certain rate of return and hence encourage them to help either improve supply or sustain it. Support price by definition is the minimum market price of a commodity.

Low prices discourage the farmers, resulting in reduced supply in the coming season, which, in turn, hikes consumer prices. “But the government has perhaps redefined the concept of support price as its intervention price is lower than the open market prices. This makes the government’s announced intention of stabilising the pulse prices a hoax,” says the study.

“The belated and ill-conceived move is likely to be futile if not a factor further complicating and aggravating the crisis,” it adds.

In the last crop season the price for gram was Rs1,000 per 40kg that later exceeded Rs1,200. In sharp contrast to this, the government has now fixed its support price at Rs750 per 40kg. Records and interviews with the farmers and dealers show that moong was sold for up to Rs2,000 per 40kg yet the intervention price fixed by the government has been fixed at Rs1,200 per 40kg. Similarly, Rs1,300 per 40kg is the intervention price for maash, which was sold for Rs1,600 during the last season. No support price for masoor, which was sold for Rs1,600 per 40kg, has been given.

The study says that the difference in the support prices and market rates of the pulses “ridicule the government’s stated purpose of making the pulses an attractive crop for farmers, increasing supply and stabilising prices. The government in fact is attempting to push the farm gate prices further down. Farmers have already low interest in growing these crops. The government decision will make them abandon these altogether making us more and more dependent on import of these grains.

“The support price is also way less than the retail prices and the Utility Store rates of these grains. Support price for wheat is 82 per cent of the consumer price for wheat flour. The support prices are 50 per cent to 60 per cent of the Utility Store prices of all the three pulses. For example, the announced support price for maash is Rs32.50 per kg while its Utility Store price is Rs58 per kg. This leaves a huge margin of Rs25.50 per kg for the dealers of the grain to pocket. The support price here seems to be more in support of traders than that of producers,” the study points out.

It is worth mentioning that pulses are not processed through any sophisticated industrial procedures at great costs. These are simply transported from farmers to the wholesale markets with a brief stopover at splitting factories that charge Rs1.40 per kg for converting the whole grains into splits.

The study says pulse production is a “risky business of fluctuating fortunes”.

“The production quantity and market prices both are able to take giant leaps upward and downwards. Some of the factors causing these changes are natural but most are man-made Farmers are losing interest in these traditional crops, and production is increasingly falling behind the demand.

“Just as the production wavers, the market price of gram also varies sharply. When the crop is bumper, the farm gate price of gram can be as low as Rs12 per kg, and in periods of scarcity the price can jump to even Rs30.

“The farmers of sandy lands of Thal have little choice besides growing grams. The land and the rainfall are not suitable for any other crop of considerable economic value. The farmers of maash and masoor, however, have a host of choices and most of them are less risky than these pulses. The maash farmers of Narowal are switching to other crops like rice and vegetables. Pakistan produced 40,000 tons of maash in 1989-90. The production has since slid down, and stood at 24,600 metric tons in 2003-04.”

Unlike maash, says the study, moong has become the farmers’ favourite crop. Some 73.9 per cent of the country’s moong was produced in three Thal districts of Bhakkar, Mianwali and Layyah in 2002-03. “The farmers grow wheat in November-April season and utilise their land for next six months for this crop. The production of this crop has been continuously rising over the last two decades. From 41,000 metric tons in 1988-89, it grew to 140,700 tons in 2003-04. The market price however varies greatly at harvesting time and in off-season. These days, brokers in Mankera grain market, Bhakkar, are willing to pay even Rs49 per kg as the crop is not yet ready for harvesting. The price will dip sharply when the farmers will start arriving in the market with tractor trolleys loaded with sacks full of moong. It may go down to Rs20 per kg.”

Despite all operational problems, the support prices are helpful for the crops that have somewhat stable levels of production. The per acre produce of rain-dependent crops like gram varies greatly. It can double or halve the previous years’ level. Its farm gate price also varies accordingly. A fixed support price if at all could favour the farmers when there is surplus, it will be a bane for them in the times of scarcity.