AS Punjab prepares for a crucial wheat sowing season, all signs tell that it may be a tough ride for farmers, planners, the province and the country.

This season is particularly important because the country has almost exhausted all its previous stocks that absorbed production shocks for the last four years.

Any shortfall this season would directly result in wheat import and add to financial, social, poverty and hunger burden of the country.

Punjab’s stocks are now down to 4.1 million tons. Out of it, one million tons are a strategic reserve for which the federal government pays. If that is taken out, the reserves are down to 3.1 million, with six months to go for the next arrival.

The private market is totally dried up now and the millers’ depend on the official stocks — the millers have time and again told this to every one in the province. They also went to the provincial Food Department a month earlier (in October against November last year) for the releases because private stocks are completely out.

If Punjab releases 400,000 tons a month as it always does, it would take 2.4 million off the stocks – leaving Punjab with 700,000 tons. With international wheat prices rising , Pakistan and Punjab may see this tonnage quickly slipping out of the porous Afghan and Iranian borders.

Unable to block borders, Punjab would see internal pressure increasing for additional releases – emptying domestic stores and increasing reliance on the next crop that the province is going to sow now.

This situation sets the context for the next crop. Unfortunately, the importance of the next crop is still to dawn on the province and planners, who are still operating in business as usual mode.

Their innocence can be gauged from production and acreage target, without making any arrangement for the both.

They have fixed the usual target of 19 million tons and acreage at 16.8 million for the province. Though Punjab has only been able to achieve 19 million tons only once in the last fours years, it still renews the target every year without taking related realities into consideration.

The 2008-09 wheat bonanza was result of two crucial factors — positive terms of trade for farmers and the policy initiative that Punjab took during those two years. This time, both are missing. How Punjab plans to repeat the feast, it is still to clarify.

In March 2008, when the new federal and provincial dispensations took over, the price of wheat was increased by 46 per cent — from Rs625 to Rs950 per maund.

Even more crucially, then the cost of wheat production was only Rs667 per maund, giving farmers a margin of Rs283 per maund.

It benefited the crop in two ways: increase in acreage and productivity, filling the country’s stocks hugely that served it for next four years.

At present, the cost of production is Rs932 and official purchase price is Rs1,050 — a margin of Rs118 per maund.

To make the matter worse, only big farmers get Rs1,050 rate, with majority selling their crop at a much lower rate. Smaller farmers either loose money or hardly break even, correspondingly decreasing their interest in the crop  Punjab has also forgotten that in 2007, it ran Rs1 billion wheat campaign, which gave much-needed momentum to the crop.

Holding production competitions, it distributed spray machines (66,000), drill machines (8,000) and even tractors (173) among the winners. It also encouraged certified seed, and elaborate farmers training programmes were run. The entire provincial machinery was moved to ensure wheat production. Even next year, it spared Rs200 millions for such a campaign.

But then it lost the initiative as production swelled to a record level and stocks became a financial and administrative liability. Since then, it has been in wheat hibernation.

This year, the situation is exactly opposite. Farmers’ profit margin is down by more than 60 per cent. The district governments are busy with activities like dengue fever, arranging green channels for cheaper supply of vegetable and have run out of money.

The provincial fiscal crunch is even deeper; it is unable to pay salaries on time and pensions to its current and former employees.

Amid all this financial chaos, wheat stocks are running dry.

It is from this situation that Punjab has to re-build its wheat momentum. It still has time to get its act together before the situation goes out of hand. To begin with, it has to sit with the federal government and shift official focus from support price to cutting the price of in-puts.

The support price benefits big farmers only, who produce big marketable surplus, whereas any reduction in cost of inputs pays smaller and subsistence farmers as well, ensuring their food, fiscal and social security.

Hitherto, the case has exactly been opposite: the federation increases support price for political motives and provinces follow with huge fiscal fallout for both.

First they pay unreasonable price to farmers and then subsidise flour for the urban population. It may be time to re-arrange priorities; bring the cost of production down instead of taking support price up.

Secondly, Punjab has to take policy and operational initiatives. It should spare money for the field force and push all of it in the wheat production preparation for the next six weeks. It has a wheat success story, which is properly documented.

What it needs is to dust it off and implement in letter and spirit. Even if it spends Rs1 billion on such a campaign and is able to add one million ton to the final figure, it would benefit the provincial economy by around Rs25 billion. That is an investment worth making for. —Ahmad Fraz Khan