LAHORE: Fearing lower prices because of multiple factors this year, stakeholders of paddy crop have sought intervention by the federal government to save them from financial losses otherwise they may not be able to recover even their input cost.
The prices of Super (paddy) on the onset of the ongoing crop harvesting season has been quoted between the range of Rs2,000 and Rs2100 per 40kg against the inaugural price of Rs2,400 last year at Kamoke, Gujranwala, one of the major rice markets in the country. Similarly, the opening price of Kainat (1121) variety of rice is between Rs1,900 and Rs2,000 this year against the rates of Rs2,200 and Rs2,300 per 40kg last year.
Abdullah, a paddy grower, tells Dawn that he like his fellow famers is very much disturbed at the low prices of the commodity because their input cost this year had gone up as seed and pesticide dealers had charged them higher rates in the name of depreciation of the rupee against dollar and subsequently costlier imports.
Whereas, their electricity bills for the farm tube-wells had also remained on the higher side because the power utility had increased its tariff on the plea of hike in oil prices, he adds.
The current paddy prices, he claims, will fail to meet even their input cost and demands that the government come up with a support price mechanism like the one being enjoyed by wheat and sugarcane growers.
Arhtis (commission agents) say carryover stock from the last season and a better Basmati harvest this year are keeping the prices lower, while exporters complain of a poor demand from foreign buyers so far.
Nadeem Chaudhry, an arhti at Kamoke Market, says there is almost 10 per cent carryover stock from the last crop while field reports suggest a better harvest this season too and thus (large) buyers have withheld their orders in the hope of a further drop in the paddy rates.
Former chief of Rice Exporters Association of Pakistan (REAP), Samiullah Naeem, who is also a progressive grower, tells this reporter that they are expecting over two million tonne production of Basmati this year while demand for the commodity from abroad is dwindling because of Covid-19 and other issues.
Endorsing the view of Mr Chaudhry, he says Pakistan built carry forward stock of rice after three years and this coupled with better crop outlook and negligible foreign demand are forcing the prices down giving a nightmare to the growers.
Lamenting at lack of reliable crop data, he said last year the country exported some 900,000 tonnes of Basmati as food security fears in the wake of the coronavirus outbreak had given a boost to foreign trade. However, now there’s a dip in the demand since the beginning of the last quarter of the current calendar year perhaps because of carryover stocks in foreign markets too due to which inventory and capital here had stuck.
Likewise, the weak financial position of Iran, one of the major Basmati markets, is also a factor behind low demand, he adds.
He suggests that the government should intervene by fixing a support price for paddy and involving the Pakistan Agricultural Storage and Services Corporation (Passco) or the Trading Corporation of Pakistan (TCP) in the trade to ensure the prices remain at a level where the growers may earn some profit besides meeting input cost.
Replying to a question about how to bring down the input cost, he says the government should promote mechanised farming as increasing per acre plant population to double the yield is possible only through mechanised rice planting instead of sowing by hand.
New seeds with better germination rates and companies providing farm machines at affordable rent are also need of the hour, he adds.
Published in Dawn, November 17th, 2020