Bashir Mohammad sits on his haunches in a corner of his rice field in a Sheikhupura village, surveying the crop that will be ripe for harvest by the end of this month. Yet there’s no evidence of satisfaction on his face; there are only wrinkles and worry.
The 58-year-old suffered significant financial losses last year when global rice prices crashed, leaving Basmati cultivators from central Punjab districts in a predicament as the commodity’s exports from Pakistan dipped sharply. Though heavily in debt, he didn’t lose heart; he hoped that wheat would make up for his rice losses.
But unfavourable weather conditions drastically cut his output. The government, reeling under its own financial problems, did little to regulate the market or help the smallholders get the wheat support price fixed for the crop last year.
“What if the rice market crashes again?” he blurts out, his eyes fixed on his fields. “I am told that the rice price is set to decline further this year. Farming is no longer enough for earning a livelihood.”
Growers have been reeling under the constantly rising prices of inputs — fertilisers, water, diesel, electricity, seeds, etc — and declining yield, causing their margins to shrink after every harvest. The recent plunge in world commodity prices has further squeezed their income.
Bashir is not impressed with the government’s announcement of a hefty kisaan package, including cash disbursement of Rs5,000 per acre among rice and cotton farmers owning up to 12.5 acres of irrigated land — to help smallholders like him compensate for their losses.
“The government had announced a cash grant when rice prices plunged last year. We did not receive any cash. How will this year be different?” he wonders. Other farmers from the area have similar woes.
With a view to helping small growers of rice and cotton and compensating them for losses resulting from plummeting commodity prices, spiking input costs, stagnating crop yields and erratic weather conditions, Prime Minister Nawaz Sharif last month announced a Rs341 billion package.
The programme promises a direct benefit of Rs147bn to smallholders in the form of cash grants for rice and cotton growers, subsidies on agricultural inputs such as fertilisers and reduced taxes on the import of agricultural machinery and equipment. It offers additional loans of Rs194bn to the agriculture sector, which contributes more than one-fifth of the GDP.
Although the package is the largest economic programme put together by the present government, most small and large farmers remain sceptical of its success; even the government’s intentions are suspect. Many see the package as an attempt by the government to influence voters during the local government polls in Punjab.
Rabia Sultan, a grower and a Farmers Associates Pakistan leader, for example, believes the prime ministerial announcement is a political gimmick before the LG polls. In fact, the Election Commission of Pakistan (ECP) on Wednesday temporarily suspended the implementation of non-budgetary schemes of the package such as disbursement of the cash grant along with a reduction in the interest rate for the purchase of fertilisers and an increase in the value of the production index unit until after polls are completed in Punjab.
The ECP considers the package a violation of the code of conduct. Some say the package was announced to benefit industrialists and growers having political clout in the assemblies.
“This programme is for large growers or rich industrialists, and not for poor farmers,” Khalid Khokhar, president of the Pakistan Kisaan Ittehad, a peasants’ group leading the agitation in Punjab for the past year, declares. “Its suspension by the ECP will not have a very big impact because it would never reach the small growers.”
He asserts: “We wanted the government to provide ‘direct subsidy’ to smallholders in the shape of substantially reduced fertiliser, water, diesel and electricity prices and the removal of sales tax on agricultural inputs to help bring down production costs. The only way to provide relief to farmers when commodity prices are plummeting is to reduce the cost of inputs.”
Cash grants, he continues, are of no use to smallholder farmers because the money will not reach them. “It will be stolen by big landowners and patwaris on the way. Rice growers never got the cash grants of Rs5,000 per acre announced last year. Loans are for big farmers or industry.”
Khokhar finds nothing new in the federal package: “It is complete eyewash; the government has only put together its previous, unimplemented schemes announced in the budget, or those before it, in one basket and presented it to the farmers as one big relief programme.”
Others don’t doubt the government’s intentions but insist the package will not help the smallholders. For example, Ijaz Ahmed Rao, a farmer from Lodhran, says, “There is no mechanism to ensure transparent implementation of the package. We don’t know if cash grants will be disbursed among landowners alone or tenants and if the benefits will trickle down to the smallholders. Landowners conduct land surveys in their name and not in the tenants’ name. That will exclude tenants from the list. It will open up a new avenue of corruption for the patwaris.”
Rabia argues that such programmes don’t have a long-term impact. “It would have been better if the prime minister announced a long-term policy of five to 10 years to revive agricultural growth and pull smallholders out of abject poverty rather than playing a trick on growers.”
Published in Dawn, October 2nd, 2015