THE government has increased the procurement price of wheat to Rs1300, an increase of Rs100, saying that the step has been taken to help the farmers.
Additionally, a regulatory duty of 20pc has been imposed on wheat imports since the price of the staple food item, which is also one of the country’s largest crops, has fallen steeply in global markets since May of this year.
The idea is to protect the farmer from the damaging effects of a steep drop in global markets as well as an increase in prices of agricultural inputs. Both steps are going to further fuel food inflation for urban consumers.
The government’s claim that it is acting to protect the interests of small farmers is being received with scepticism.
Small farmers find it very difficult to access the benefits of the support price since the procurement machinery tends to give red-carpet treatment to large landowners with political clout. If the steps are indeed being taken to help farmers, further reforms should also be pursued in tandem.
Besides the procurement price, critical agricultural inputs such as agri credit and fertiliser distribution are appropriated mainly by the large landowners.
Reforming the procurement machinery as well as fertiliser distribution to ensure that the state support provided through these is properly targeted is essential.
Crop insurance is virtually non-existent in Pakistan, and it should also be made a priority since it can significantly contribute towards documenting the sector, as well as improving the targeting of agricultural subsidies and support prices.
If the government is serious about helping farmers, then it should follow up its steps to safeguard farmer incomes with reforms to ensure better targeting of its initiatives. If the next wheat procurement season is again marred by allegations that large landowners have walked off with the lion’s share of the benefits of the price increase, it will cast a dark shadow over the government’s credibility on such a sensitive issue.
Published in Dawn, November 6th , 2014
