LAHORE, Nov 28: The federal government, under intense pressure from the Punjab government, may soon announce wheat support price of Rs500 per 40kg. According to sources in the Ministry of Food, Agriculture and Livestock, the Punjab government is pressuring the centre to announce a price that “matches market realities.”

In the absence of a procurement price, wheat price may spin out of control of the market forces and may cause a social upheaval before elections.

The Punjab food department has pleaded the case on certain merits, and maintained that in the absence of any official price, it will end up competing with the private sector, which has unlimited capacity to increase price.

The department would be in a wild chase that would put wheat market upside down. If it does not have any wheat in stocks, it would not be able to keep flour price under control, thus triggering a social chaos.

If the next crop is healthy and the government agencies fail to act actively, the private sector may cause a price crash through slow purchase policy.

If crop was less than its target, which most probably would be, the government would be chasing an ever-increasing price, because private sector’s capacity may inflate price beyond official reach.

The slow sowing has also become a powerful factor in Punjab’s case for procurement price.

Up till now (Nov 28), the wheat sowing has not gone beyond 50 per cent. It is worrying wheat planners because the most propitious date has passed some 10 days ago.

All the wheat sown now would cause a drop in final yield. The total loss of late sowing may translate into 25 per cent reduction in the final yield.

The price of DAP fertiliser which has doubled in the last eight months has become another factor of slow sowing.

In these circumstances, only a good price can attract farmers back to wheat sowing, maintains the Punjab government.

Punjab government had even threatened to go ahead with its own price, but was told to wait for a federal decision on the issue, the sources claimed.

The Punjab, they said, had argued its case on the basis that the announcement of procurement price would rather control the market price, which at present was hovering around Rs650 in some parts of the country.

The federal government has, however, assured the Punjab government that support price would be announced soon.

Though the Punjab government had recommended Rs515 per 40kg price, but the federal government has developed a consensus for Rs500 per 40kg.