Punjab may alter wheat policy for next season

Updated June 01, 2020

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Flour shortage looms large. — AFP/File
Flour shortage looms large. — AFP/File

LAHORE: The Punjab Food Department has hinted at changing the volume and procedure for procurement of wheat from next season considering the heavy allocations the provincial government has to make for the purchase of grain.

“As the wheat buying drive requires heavy spending, we’ll review the procurement policy and volume of the procurement,” Food Minister Abdul Aleem Khan was quoted as telling a meeting held here to review the ongoing wheat procurement campaign and availability of its products, particularly flour, in the open market.

The statement hints at government’s intentions to at least reduce the size of wheat procurement as per an agreement with the World Bank.

The Punjab government had signed a $300 million agreement with the international lender to reform its agriculture markets, particularly deregulating the wheat business and phasing out the state role easing the pressure on the provincial kitty for making available huge funds for the purchase and then incur its storage charges, etc.

Flour shortage looms large

For the ongoing season, the government had to allocate over Rs150 billion funds to buy 4.5 million ton grain at the minimum support price of Rs1,400 per 40kg.

The Strengthening Markets for Agriculture and Rural Transformation (SMART) programme was to begin from the 2018-19 wheat procurement season. But, so far little progress has been made on it.

A Food Department official says they plan to cut the grain buying target to two million ton from 2021-22 season though a final decision will be taken by the end of the ongoing calendar year.

The minister was further quoted as saying that all stakeholders will be taken into confidence before changing the procurement policy.

He also claimed that the province had achieved its procurement target and now it’s arranging wheat for Khyber Pakhtunkhwa and added that from next year both Punjab and Khyber Pakhtunkhwa would jointly buy wheat.

Meanwhile, the city is inching towards flour crisis because of indecision during meetings between the Food Department and flour millers on the prices of the wheat products.

Citing increase in grain prices in the open market and no supplies to mills by the Food Department on controlled rates, the Punjab chapter of the flour millers’ association had announced increase in flour prices in proportion with the wheat rates in each division of the province three days ago.

The millers have reduced flour supplies to retailers leading to shortage of the commodity in some areas and if the stalemate between the department and the industrialists continues for some more days, the situation may become grimmer.

The flour millers demand an increase of Rs120 per 20kg bag for Lahore division, where wheat price in the open market has touched Rs1,400 per 40kg mark, while the government is determined not to allow the hike.

Published in Dawn, June 1st, 2020