HYDERABAD: Sindh is likely to have a healthy wheat crop in the 2020-21 season. Harvesting of the crop has already begun in lower parts of the province and owners of roller flour mills and chakkis are purchasing wheat.
Official figures indicate that Sindh has surpassed its wheat acreage target for 2020-21, as 100.01 per cent of sowing was achieved against a target of 1,200,160 hectares (ha).
The target of four million tonnes of grain production was set by the government for the current season. Growers anticipate healthy wheat crop production due to the size of the grain.
Last year Sindh had missed the sowing target by 1.4pc as 1,134,219ha was brought under cultivation against a target of 1,150,000ha, although a production of 3,848,105 tonnes — 1.3pc up from the target of 3,800,000 tonnes — was achieved.
Wheat sowing over and above the target is attributable to timely commencement of crushing season of sugarcane in October 2020 as most sugar factories had started crushing sugarcane by then, enabling wheat producers to sow wheat on land vacated by sugarcane. Usually, sugarcane sowing target is between 310,000ha and 320,000ha and in 2020-21 sugarcane acreage was missed by around 7pc.
Sindh’s food department has decided to procure 1.4m tonnes of wheat at a support price of Rs2,000 per 40kg, which was announced by the provincial government. But the rate has not been notified yet. The federal government has, however, fixed the rate at Rs1,650 per 40kg.
Disparity in support prices of Sindh and Punjab may be exploited by unscrupulous elements
“We feel the Sindh government will stick to its Rs2,000 support price but there are indications that Punjab might raise it from Rs1,650 to Rs1,800 per 40kg. Now there is every likelihood that traders [in Sindh and Punjab] will have a field day in capitalising on two different prices in wheat procurement [in Sindh],” said a food department official.
He also added Punjab would have to check interprovincial movement of wheat if support prices remained different.
Wheat procurement is to begin by end of March or April in Sindh. This provides a golden opportunity to traders to buy crop from Punjab at Rs1,650. Apart from being a lucrative business, wheat procurement in Sindh is always marred by manoeuvring (which is reflected by back-to-back wheat scams), belated procurement, slow crop purchase and pocketing of support price — actually meant for small- and medium-size farmers — by unscrupulous officials and influential landowners.
Farmers always suffer as subsidy rarely reaches those it is meant for. Due to the Covid-19 pandemic, the Sindh government in 2020 couldn’t meet the procurement target of 1.4m tonnes. It had to make do with around 1.235m tonnes of grain production at a support price of Rs1,400 per 40kg in 2019-20 amid reports that farmers sold their crop to traders for a lower price on average.
Vice president of the Sindh Abadgar Board Mehmood Nawaz Shah said SAB presses for a uniform price. “The food department has a track record of belated wheat procurement.
This year such an option… will allow it to collude with traders and cash in on the scenario. Sindh’s rate is higher and traders will buy wheat at lower price from Punjab to sell it in Sindh to cash in on this situation,” he argued.
Sindh’s food secretary Haleem Sheikh is, however, optimistic about the crop outlook. “Four million tonnes of grain production looks achievable,” he said. Wheat procurement centres have been finalised and in all probability the department would start lifting wheat in the last week of March, he added.
The food department is seeking enhancement in the commodity credit limit (CCL) from Rs130 billion to Rs152bn through the federal ministry of food and national security. The CCL is to be increased by the State Bank of Pakistan (SBP), which releases money to provinces from procurement operations across Pakistan.
The food department needs Rs70bn for procurement this year. It owes Rs82bn to the SBP for past procurement activities. The two figures would cumulatively take Sindh’s CCL to Rs152bn.
The food department has exhausted the carryover wheat stocks for now. Stocks were released to flour mills and chakki owners until February at an official price of Rs3,886 per 100kg. Wheat was being lifted for the purpose from godowns in areas of lower and upper Sindh like Naushahro Feroze, Dadu and Bholari.
Published in Dawn, March 7th, 2021