Sindh Chief Minister Qaim Ali Shah has approved in principle a support price per maund of Rs1,000 for paddy and Rs3,200 for phutti as proposed by the provincial agriculture department. Formal approval and an official notification is, however, awaited.

Despite reservations, growers finally ended up agreeing to the prices proposed by the provincial government, though the Sindh Abadgar Board (SAB) had suggested Rs1,150 for paddy and Rs3,400 for phutti, while the Sindh Chamber of Agriculture (SCA) had demanded Rs4,200 for phutti and Rs1,500 for irri-6 and Rs2,500 for basmati. In 2012, the government had fixed a price of Rs900 per maund for paddy and Rs2,700 for phutti.

“Our cost of labour has increased and we have now to pay Rs200-250 alone for per maund for picking up phutti against Rs100-120 a few years ago. The cost of land preparation and inputs continues to increase. Last year, the growers got an average of Rs2,600 per 40kg of phutti,” said Zahid Bhurgari, a SCA representative.

While farmers were present in the meeting for fixing the support price, chaired by the provincial agriculture minister, no consultations have been held with ginners or rice millers so far. Ginners and millers always have their own axe to grind when it comes to paying to producers. Their actual purchasing price depends on the market situation, and according to rice millers like Arif Mahesar, if the government is committed to lift paddy from the growers or milled rice from millers, the support price will be meaningful; otherwise it will be an exercise in futility. “The government lifted rice from millers in 2010 as growers were not getting required rate of paddy then”, he recalls.

The Sindh government proposes to fix support prices for two more crops besides sugarcane and wheat, but the main issue will revolve around the weak implementation mechanism

The Sindh agriculture department has proposed indicative prices for two more crops besides sugarcane and wheat, but the main question will revolve around the weak implementation mechanism. This is evident from the fact that the provincial government fails to make millers pay the notified rates to cane producers.

The farmers agreed to the support prices, believing that the government would make efforts to ensure that growers get the rates in the future. This process, they feel, will also lead to determination of cost of production of two crops at the official level.

“But there has to be some structure to formalise the process. The input cost has to be assessed at the time of price setting, but the most important thing is how effective the implementation strategy is”, says Sindh Abadgar Board Vice President Mahmood Nawaz Shah.

Last year, the provincial government failed to make sugar mills pay Rs180 announced by the then-agriculture minister and kept the cane rate unchanged at Rs172, which was fixed in 2012.

Farmers also complain about unjustified deductions by rice millers and ginners that runs into millions of rupees. Ginners deduct the weight of phutti — considering it of inferior quality, mixed with foreign matter or discolouring — while the paddy crop is subjected to cuts for having higher level of moisture. Usually 14pc of moisture content in paddy is acceptable by the millers. If it increases, then the weight is deducted, according to Mahesar.

Shah points out that unjustified deductions in phutti and paddy crops make support fixed prices irrelevant. He says that rice millers and ginners being the buyers and stakeholders should be on the same page if the government really wants to see that prices fixed by it reach farmers.

“They [rice millers] make deductions on every percentage of moisture in paddy crop if it crosses the acceptable limit. We say 22pc moisture content should be the benchmark. Paddy is a high delta crop and it remains submerged in water from the time when it is transplanted till its harvest, so moisture is bound to be there”, argues Nabi Bux Sathio, General Secretary SCA. He adds that farmers will lose around Rs100 if four kg of crop is deducted in weight, which means that they will be getting Rs900 instead of Rs1,000, as being proposed.

Sowing targets of paddy and cotton are fixed at 700,000 and 650,000 hectares respectively. Until the third week of June, paddy was sown on 125,426 hectares (18pc of targeted acreage) and cotton on 587,134 (90pc of target acreage) respectively. Cotton sowing in lower Sindh has been completed and agriculture officials believe that the sowing target will not be achieved due to water shortage in Kotri barrage’s command area. Paddy cultivation is underway in upper Sindh where supplies of irrigation water are improving.

Published in Dawn, Economic & Business, July 14th, 2014