LAHORE, March 30: The Punjab Food Department has prepared a contingency plan for purchasing three million tons of wheat against its official target of two million tons. According to Food Department officials, they are also in the process of arranging gunny bags for the extra purchase. The department has gunny bags for 1.9 million tons and is placing an order for additional bags for 800,000 tons. Thus, it will have bags for 2.7 million tons of wheat by the time procurement season starts.

Though official target, they said, was still two million tons but it could be enhanced if wheat price started sliding.

About credit line for additional purchases, if need be, they said, it could go up to the required quickly.

They said the department would execute the plan as second line of defence when, and if, the Punjab government gave it a green signal.

The gunny bags are being distributed to flag and purchase centres and they should be in place before April 20 when the procurement drive starts.

Welcoming the plan, some farmers said it would stabilise the market on a bit higher side. Though the private sector was smart enough to make exact calculations based on market realities and official stocks, but the government’s promise to revise target upwards must help stabilise the price, they said.

“One cannot say why the department has prepared the plan,” says an official of Farmers Associate Pakistan. “Is it a bluff, or government is ready to execute its plan, will determine farmers fate this season. The government must realise that if it does not come to farmers rescue this season, growers will be in real trouble,” he said.

He said the government had to arrange credit line in order to substantiate its potential plan. If it did that, he said, only then it would be able to achieve the intended target of its contingency plan.

Once the price started sliding, the government would be under intense pressure to increase target, he said and added: “It should have stopped importing wheat by December last when it calculated that domestic stocks would not be exhausted by the end of season and it would be carrying massive stocks forward. It did not do so and let the farmers suffer possibility of price crash.”

“Removing of export duty on wheat and wheat products has not helped the local market,” says a flour miller from Lahore. The only option left with the government was either to impose import duty or go on a massive buying spree, he said. The private sector would only buy wheat when it was assured of some profit. With present import price of Rs380 per 40kg, it had no charm in procuring costly domestic wheat, he added. Even if it did purchase some wheat, it would do so at the end of the harvesting season when price trend had already been set, he said.

In order to stabilise market in the start of the season, the government must come up with concrete solutions like slapping import duty and upward revising its purchase targets, he said. Otherwise, wheat market would really be under intense price pressure, he said.