The Khyber Pakhtunkhwa government has announced that it will directly purchase wheat from growers this year instead of buying the grain from other sources. And the provincial food department’s procurement drive will be financed by the Bank of Khyber.
The direct procurement is expected to save around Rs6,000 per ton and could help cut provincial government’s expenditure by Rs2.5 billion in the procurement target of 0.4 million tons.
While acknowledging the sharp rise in cost of production, the Agriculture Planning Institute (API) has recommended a wheat support price of Rs11.50 per 40kg for the coming season.
This recommendation has been forwarded to the federal cabinet for approval. But approval of provincial chief ministers would also be needed for the price raise as the ministry of food and agriculture stands devolved after the 18th Constitutional Amendment.
Whether the chief ministers would approve the proposal or not is yet to be learnt, because of its impact on urban consumers.
As the elections due in t one and a half years, the government may find itself in a fix to take an early decision. It wants to please the growers by increasing the wheat support price but also knows that the increase would fuel food inflation and may result in public backlash. This explains the delay in taking the decision on the issue.
The high prices of farm inputs have raised the cost of production. The API, keeping this fact in mind, has also stressed the government to withdraw taxes and duties on agricultural inputs.
Small growers have been complaining of negligence and malpractices in the procurement system. “Officials purchase of the commodity from middlemen but the growers have numerous complaints. The procurement centres discourage and compel growers to approach their agents,” a farmer complained.
“Because of delays in assessing the crop, that expose the produce to thieves and vagaries of weather (as it is mostly kept lying in the open at procurement centres), and frequent wrong assessment and rejection of their wheat quality/variety, farmers usually prefer to sell their produce to private buyers for quick deal at four to five per cent lower rates,” he said.
The middlemen, who usually work as cartel, often reduce demand that results in price crash.
In the past, Khyber Pukhtunkhwa has never been able to achieve its wheat procurement target owing to shortage of finances, wheat procurement centres, storage facilities and extensive role of the middlemen in the process. The procurement system needs to be revamped.
“The government should enter into pre-sowing wheat purchase deals with farmers. It should announce the list of wheat procurement centres and increase the number of such centres. Interests of small growers should be safeguarded during the procurement of the crop, especially of those from the floods/militancy hit areas,” says a farmer.
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