Growers demand Rs10bn bailout

Updated September 10, 2018


A recent controversy over the sugar cane rate, water shortages and the withdrawal of a subsidy on vital farm inputs like urea and diammonium phosphate (DAP) have had serious implications for growers. This is why Sindh-based growers have now demanded a bailout package of Rs10 billion.

The last federal government of the PML-N gave the subsidy on urea and DAP, which has now been withdrawn. The decision is bound to hurt the urea uptake, which will hit the per-acre productivity.

Sindh Chamber of Agriculture (SCA) Vice President Nabi Bux Sathio says the growers expect the federal government to share the cost of subsidy in tractor and laser land leveller schemes.

Subsidy withdrawal and water shortages have brought Sindh-based farmers under financial strain

He claims the withdrawal of the subsidy on farm inputs means Rs4.5bn and Rs2-2.5bn will no longer be available for urea and DAP, respectively. Mr Sathio believes that farmers will benefit greatly if such a package is announced by either the provincial or the federal government. The two governments can also share the cost of the package, he added.

He contends that the tractor scheme was launched many years back when the cost of a tractor was about Rs600,000, with the share of the Sindh government at Rs250,000. Now its cost has increased to Rs1.7 million, but the amount of the subsidy remains unchanged. He adds that the federal government should also support farmers in obtaining tractors and laser land levellers.

Following the withdrawal of the subsidy, the cost of a urea bag has increased up to Rs1,700 from Rs1,200-1,300 while that of DAP has climbed to Rs3,600 from Rs2,600, according to the growers.

A shortage of water during the Kharif season has dealt a severe blow to major crops like cotton and sugar cane. This means the growers will face losses. However, belated improvement in water flows has rekindled hopes among paddy growers. They will now be able to sow the crop.

Sindh is also said to have missed its cotton-sowing target for 2018-19 primarily because of a water shortage. The target was 620,000 hectares, but only about 400,000 hectares could be brought under cultivation.

The agriculture department will take some time to compile final cotton cultivation figures to determine the drop in cotton acreage in the current season.

However, some growers had access to underground sweet water. Such growers are now having a second or third picking of cotton.

For example, Syed Nadeem Shah, a cotton grower in the Matiari district that is fed by the Rohri canal system, is having the third cotton-picking. He is satisfied with the price of cotton that was initially Rs4,600 per 40 kilograms. The rate has dropped to Rs3,600 per 40kg since most ginning factories have started functioning .

Small growers, however, don’t get this rate and remain at the mercy of middlemen.

Mr Shah says he wasn’t able to grow paddy due to the unavailability of water in Thatta, a district in lower Sindh.

According to SCA General Secretary Zahid Bhurgari, cotton boll formation has yet to take place in areas like Badin, Thatta and Mirpurkhas. “Those who had cultivated cotton didn’t get subsequent flows. As a result, plants went dry. This necessitates the bailout package,” he said.

The controversy over the sugar cane’s indicative price in 2017-18 has discouraged growers from sowing the same crop in this season.

The crushing season (2018-19) will formally begin in the next couple of months. Provincial agriculture officers claim that there is a considerable drop in acreage for the current season. Growers cultivate sugar cane in October-November and then in spring ie February.

One report suggests that around 50,000 hectares were not brought under sugar cane cultivation in the 2018-19 season as opposed to the target of 322,000 hectares. According to Mr Shah, he cultivated sugar cane only on three acres for the seed purpose.

Sindh’s total Kharif crop acreage stood at 2.19 million hectares in 2016-17. The share of sugar cane was 320,501 hectares or 14.6 per cent. Final figures for the summer crops’ total acreage for 2017-18 are not out yet.

“We note that we are losing acreage under sugar cane this season due to issues like the millers’ obstinacy about not paying the notified price, inordinate delays in the start of crushing almost every season and belated payments,” says an officer of the Sindh agriculture department. He says the growers will switch over to paddy or other small crops.

Sindh has recorded 85pc paddy sowing in the current summer season. The paddy crop is largely grown in upper Sindh, which is fed by the right bank canals of the Indus. The growers in these areas often opt for late sowing. Luckily, water flows have improved lately, helping paddy growers sow the crop.

Published in Dawn, The Business and Finance Weekly, September 10th, 2018