ANNUAL wheat harvest crossed 25 million tonnes for the fourth year in a row in the previous fiscal year, according to the State Bank of Pakistan (SBP). As this amount exceeds the domestic consumption, the country had 5.7m tonnes of wheat in stock by June due to successive surpluses over the years.

The problem is that maintaining such high level of stocks has a cost. Moreover, exporting wheat has also become costlier, as the government kept procurement prices significantly higher — particularly when global prices are falling persistently over the past few years.

The situation is likely to persist as global wheat prices are expected to remain lower on the back of better harvest in major wheat-exporting countries.

The SBP annual report for 2016-17 certainly provides plenty of food for thought. Our policymakers should ensure a balanced wheat production while making winter crops, particularly oilseed and pulses, viable to reduce food imports, the third biggest component of the Pakistan’s overall import bill.

Food imports in the previous fiscal year stood at $6.13 billion, including $1.9bn spent on edible oil and $2.05bn on ‘other food items’.

Pulses’ imports surged to 1.23 million tonnes (costing $952.25m) in 2016-17 from 898,615 tonnes in 2015-16, according to the Pakistan Bureau of Statistics. It put importers in a quandary as demand for pulses remains lower on the retail market.

The acreage has fallen to near 70,000 acres from 270,000 around seven years ago in the province

Oilseed crops such as canola and sunflower are considered the best alternative to wheat in Sindh and Punjab. Punjab has already pitched in a Rs1bn subsidy (Rs5,000 per acre for a maximum of 10-acre cultivation) for canola and sunflower this season.

But the Sindh government continues to look the other way the acreage of sunflower crop declines.

“We can substantially reduce our import bill in three to four years if the cultivation of these crops gets positive response from farmers and the government,” says Khalid Mehmood Khokhar, whose Pakistan Kissan Ittehad strongly supported this subsidy in Punjab.

Sunflower involves lower input costs and can be ideally grown between October and February, even with nominal irrigation water supplies and marginal soil quality.

However, despite having become the best Rabi crop option in Sindh, its cultivation has not been sustainable due to low prices and the absence of quality seed.

“It only needs government’s focus on research and development. With government intervention, the demand for edible oil production can be met and wheat surpluses can be balanced,” says Mahmood Nawaz Shah of the Sindh Abadgar Board.

Only seven years ago, sunflower was grown on 266,964 hectares in Sindh in 2010-11 (when countrywide acreage was 300,614 hectares), indicating the potential for sunflower cultivation in the province.

However, the acreage then plunged to 65,883 hectares in 2015-16 before rising slightly by 2,000 hectares in 2016-17.

Noor Mohammad Baloch, Sindh’s director general for agriculture research, says the acreage dropped due to water shortage. He perhaps ignores the fact that sunflower is a low-delta crop, that is it doesn’t require much water to grow. Simultaneously, high-delta crop like rice is thriving and surpassing sowing targets.

The department’s research station has not been able to introduce new higher-yield varieties of sunflower. The available HO1 local variety gives 15-16 maunds per acre. (One maund equals around 37 kilograms.)

Sunflower grower Nadeem Shah says growers prefer imported hybrid seed to local variety for getting higher yields in Sujawal district (previously part of the coastal Thatta district).

He used to get a per-acre yield of 15 to 20 maunds and sell the produce for Rs2,200 to Rs2,300 per 40kg. However, yield has now dropped to seven to eight maunds and price to Rs1,500 and Rs1,800.

Moreover, “unjustified” deduction by buyers due to moisture in the crop also makes matters worse for growers, he says.

Even hybrid seed is not performing, he says, adding that local seed is also unavailable in the market.

This is why Nadeem Shah has reduced the area under sunflower cultivation to 25 from 200 acres.

In September, Prime Minister Shahid Khaqan Abbasi chaired a meeting on food security soon after he took office. The meeting lasted for three hours and, according to officials concerned, the premier expressed concern over the country’s reliance on edible oil imports and the overall food import bill.

He tasked the Pakistan Agriculture Research Council (PARC) to come up with a working paper to address the issue.

“We are importing low-quality oil. And since the solvent industry gets it on the cheap, it finds its import viable,” says Dr Yusuf Zafar, director general of the PARC. “Besides major crops, we need to give importance to pulses and oilseed crops to get out of this quagmire.”

Pakistan is producing surplus wheat and sugar, which forces the government to subsidise its exports as global prices remain lower. Just last month, the government allowed subsidised export of half a million tonnes of sugar at the rate of Rs10.70 per kg.

Sugar millers are not ready to start sugarcane crushing on time and refuse to offer more than Rs120 per 40kg to growers unless surplus stocks are exported.

There are no calculations by government how much pulses have been imported by market players in the last few years. However, Karachi Wholesale Grocers Association chairman Anis Majeed says annual imports recently touched around 1m to 1.2m tonnes as compared to normal figures of 500,000 to 700,000 tonnes.

“We don’t know how to dispose it of in the retail market. We have excess stocks of lentils (masoor), desi chickpeas (kala chana) and black matpe (sabut maash),” he says, adding that the government is least concerned about imports. “The government and importers are not on the same page,” he says.

He believes that increasing population and low domestic production of pulses have paved the way for a rise in imports.

The PARC has developed a Rs2.24bn project under the Public Sector Development Programme to improve pulses’ productivity by developing new varieties, ensure free supply of new an advanced seeds to poor farmers and introduce farm mechanisation in four varieties of pulses, i.e. moong, maash, masoor and chickpeas. The 10-year project is set to start in January.

Moreover, the PARC has proposed that the quality of palm oil being imported should be checked to discourage its imports. However, the top research body will take time to come up with an oilseed crops project for which it is reported to have submitted a brief to the prime minister.

Published in Dawn, The Business and Finance Weekly, October 30th, 2017