LAHORE, May 2: The government may soon increase support price of gram if it wishes to procure the commodity even for strategic reserves, say sources in the ministry of food, agriculture and livestock (Minfal).
They say that gram price in open market has risen from Rs700 per 40kg to over Rs900 in the last few weeks. That is precisely the reason why Pakistan Storage and Services Corporation (Passco) has not been able to start procurement despite all arrangements.
Passco is offering official price of Rs850 per 40kg whereas market price has already gone beyond Rs900. No farmer is ready to sell the commodity to Passco owing to price factor.
Federal minister for food, agriculture and livestock Sikander Hayat Bosan, is currently visiting gram areas to assess the situation.
"Yes, the Passco has not been able to start procurement of gram due to price factor," says managing director, Maj-Gen Saleem Ahmad Nawaz Mela, adding the government is happy that farmers are getting better prices due to its interference.
Had it not been for huge official procurement target of 200,000 tons, private sector could not have jumped into the market and prices may not have risen to the current level.
The corporation would continue waiting in the wings to cover the possibility of price crash, which hopefully would not, he said.
He said the corporation has recommended to the government to increase price by at least Rs925 per 40kg if it wished to procure gram stocks for strategic reserves.
The government used to procure around 20,000 tons to stabilise the gram market. But, it decided to procure 200,000 tons this year and drove the market up. The corporation has made all arrangements to buy the fixed amount by arranging finance and evacuating its stores.
Welcoming the Passco recommendations and possibility of price increase, gram farmers said it was the need of the hour. The country had better crop and better price this year, which is a rarity, they said. The growers were fearing price crash due to healthy yield, but that has not been the case, they said.
Mohammad Afzal, a gram grower from Layyah, says price has certainly gone up due to government interference. The official interference has already achieved the intended target by stabilising market on the higher side.
Now, the government would only be following the market logic if it further increases the procurement price. But, it must procure some strategic reserves to subsequently keep a lid on price. Otherwise, the private sector would make windfall profit at the cost of urban consumers.
