Stakeholders hopeful of good harvest: Rain impact on crops
By Sabihuddin Ghausi
KARACHI, Sept 15: Businessmen, farmers and the officials are “cautiously optimistic” on harvesting prospects of autumn crops that have a direct bearing on achievement of about 7 per cent economic growth target fixed for the current fiscal year.
The high GDP growth has a lot to do in employment generation, poverty alleviation and these also impact import and export trade.
With a 23pc share in the economy that provides employment to about 45 per cent of labour, the performance of agriculture in 2005-06 was very disappointing as it grew just at 2.5pc. More distressing was lower than target production of two main autumn crops — cotton and sugarcane.
All stakeholders are now watching anxiously the effect of rains on the standing crops this season.
The Sindh Agricultural Secretary hopes to get a good harvest from all the autumn crops. He said that rains did cause some damage and loss particularly in the lower Sindh but the crops had by and large remained unaffected in the upper Sindh.
The crop assessment obtained from officials, businessmen and the farmers points out that not much damage has been done by the rains. The indications are that there will be 12.5 to 13 million bales of cotton, about 5.70m tons of rice and 50m tons of sugarcane this season.
If not very good, the harvesting prospects are not that bad. But what haunts businessmen, farmers and the market analysts is the conversion of friction among the conflicting interests in agriculture trade into a major dispute.
“For last more than 50 years there have been disputes virtually every year between the cotton growers and the spinners, sugarcane farmers and the milers and rice planters and the traders,” recalled a senior business leader.
He foresees the sparks of these built-in conflicts this season also and wonders if the government has any capacity to address such issues and bring about some sort of sanity among all the stakeholders.
If everything goes well with no disputes and hiccups as was witnessed last season, such an output of the autumn crops should contribute more than 55 per cent to total GDP now being estimated at around $145 billion.
The export of textiles and rice should fetch about $15 billion engaging at least 60 million people in gainful employment and pump in substantial amount of resources in rural economy that should create demands for more goods and services from the industry.
The year 2005-06 will be remembered for a biter price dispute between sugarcane growers and the millers which delayed the crushing from October to
beyond December and an unprecedented rise in retail prices.
The prices of sugar skyrocketed to unprecedented levels since last spring as the government was found totally helpless in dealing with its own ministers and legislators who are directly involved in sugar business.
Sugar prices for consumers still range between Rs38 to Rs42 a kg in face of almost a glut like position of sugar stocks in the market.
Sindh Chief Minister Dr Arbab Rahim wants sugarcane crushing to commence from October this season. But according to media reports the sugar industry leaders are not ready to start crushing from October as they carry an inventory of about half a million tons.
The importers too have stocks of 300,000-400,000 tons of sugar and the Trading Corporation Pakistan has started unloading its stocks in the market.
Millers want the TCP to stop unloading sugar stocks in the market. The government should stop import of sugar and remove regulatory duty on export. After all these conditions are met, the millers will consider commencing crushing from January.
“We are ready to supply sugarcane for crushing to mills after Eid provided the millers give us a fair price,” Sindh Agriculturists Association President Syed Qamaruzzaman Shah told Dawn from Hyderabad by telephone.
Mr Shah had taken a hard line on sugarcane price issue last season. Millers had to pay up to Rs100 for 40-kg of sugarcane to the growers in Sindh. Many growers now expect a high price if not the same.
Punjab government has fixed sugarcane support price at Rs60 per 40-kg which apparently is not approved by the farmers in Sindh.
With all these factors around in full play and the government’s inability to rein in its own ministers and legislators who are both millers and rich farmers, the market analysts fear a dispute that would hurt consumers the most.
“September is too early to forecast about the size of cotton crop,” remarked Zahid Bashir, chairman of Karachi Cotton Association (KCA). But he quoted a monthly bulletin of US Agriculture Department which estimates cotton production in Pakistan at 13 million bales, which according to Zahid Bashir “is not too far detached from official target of 13.8 million bales”.
Nonetheless, he was not ready to offer his assessment of the crop as according to him the tendency was that “farmers tend to suppress production estimates to get higher prices and urban based business is always optimistic to get some discount”.
Nadeem Maqbool, former chairman of All Pakistan Textile Mills Association (Aptma), expressed the view that rains had not done much damage to cotton crop in Sindh and Punjab. “The industry is in fine shape, the cotton crop is good but the businessmen are hard-pressed because of high cost of business,” Nadeem said.
