Punjab to restructure wheat market with World Bank assistance

Updated May 03, 2020

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Under the initial plan, the provincial government was to notify by 2018 its plan to gradually withdraw wheat procurement programme. — Reuters/File
Under the initial plan, the provincial government was to notify by 2018 its plan to gradually withdraw wheat procurement programme. — Reuters/File

ISLAMABAD: Punjab government has decided to restructure its wheat market reform process under the World Bank’s Punjab Agriculture and Rural Transformation Programme.

The provincial government has decided to begin discussions with the World Bank on restructuring the project during the upcoming mid-term review.

The implementation of $300 million ‘Strengthening Markets for Agriculture and Rural Transformation’ (SMART) began in February 2018 and overall progress of the programme has been on track.

However, the wheat market reforms were not implemented as envisaged under the original plan.

Under the SMART project, the provincial government was to deregulate the market to reduce wheat and flour prices while moving land released from wheat production into high value agriculture to raise farm incomes and employment.

Under the initial plan, the provincial government was to notify by 2018 its plan to gradually withdraw wheat procurement programme. The wheat procurement was to be gradually reduced to 3m tonnes in 2019, 2m tonnes in 2020 and zero by 2021.

The provincial government was to reduce the strategic grain reserves to not more than 2m tonnes with excess quantities to be auctioned off. Modern bulk storage facilities for up to 2m tonnes were to be established under a public-private partnership basis.

The World Bank had estimated that withdrawal from the wheat market by the government would save substantial fiscal resources that could be reallocated to help farmers transition to high value agriculture.

A World Bank report on the implementation of the project said the programme has made good progress with respect to modernising agricultural markets and rolling-out an agricultural insurance system.

The Punjab Agricultural Marketing Regulatory Authority (PAMRA) Act was approved by the Punjab Assembly in March this year, and the passing of the act symbolised a big step forward towards establishing a well-functioning agriculture produce marketing system.

According to the World Bank document, the project has achieved targets for improving access to quality farm input, transitioning to high-value agriculture, modernising agricultural markets, rolling out an agriculture insurance system and increasing public investment in climate smart agriculture.

The targets for crop and livestock research and extension, modernising the wheat marketing system, improving market condition for meat and raw milk, and improving food safety have not yet been initiated since the start of the project in 2018.

The work plan for targeting input subsidies through Kissan Card, including the resource allocation required for the implementation have also been finalised.

The card will be launched by December this year. In addition, a reliable monitoring system for water delivery with adequate spatial and temporal coverage has also been established.

The card would enable programme to provide vouchers or cash to small farmers through their cell phone which in turn are uniquely linked to their CNICs.

So far, some 1.2m farmers have been registered and it is expected that 90 per cent of all farmers in the province will be registered by 2022.

However, the design capacity building programme for women and small and medium enterprises in business development strategy, project management, entrepreneurship and marketing for the agribusiness and innovation fund have been delayed.

Published in Dawn, May 3rd, 2020