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No raise in wheat support
price
ISLAMABAD:The federal cabinet here on Wednesday turned down a
proposal to raise the wheat support price by Rs 25 per 40 kg
for the fresh crop, giving no relief to the farmers.
The cabinet decided to maintain the wheat support prices at
the last year's level of Rs 300 per 40 kg despite Agricultural
Prices Commission's report discussed in a meeting on Wednesday
that the cost of wheat production had risen to Rs 307 in
Punjab and Sindh provinces and the growers needed immediate
raise to meet their rising expenditures.
So after the latest cabinet decision of no increase in the
wheat price, farmers will be selling their major cash crop at
a loss. Earlier, the Agriculture Ministry recommended to raise
the wheat support price from the existing Rs 300 per 40 kg to
Rs 325 to give a message to growers to grow more wheat in the
country.
Sources said the proposal had been rejected as international
lending agencies were continuously pressing the government to
do away with the support price system for various crops in the
country and let the market forces work independently.
The Asian Development Bank and the Government of Pakistan have
just signed an agreement for the provision of a loan of $350
million which also envisages sweeping market reforms in the
agriculture sector including abolition of support price system
and subsidy.
Meanwhile, at a hurriedly called press conference at his
residence, the Agriculture Minister, Khair Mohammad Junejo,
justified the rejection of his ministry's proposal regarding
increase in the support price.
The minister was of the view that it was thought prudent to
improve the wheat procurement system in the country instead of
raising the wheat support price as it was sufficient and there
was no need to raise it right now.
He was of the view that if the commodity was marketed in an
appropriate way, the growers will be happy to receive Rs 300.
He said the issue of wheat price was also discussed with the
provincial governments and they were also unanimous in saying
that there was no need to raise the support price if the
government was determined to improve the procurement system.
But, Mr Junejo could not reply satisfactorily that if the
Agriculture Ministry and the provinces were agreed that there
was a dire need to better the wheat procurement system instead
of raise in the wheat price, why the ministry had prepared a
summary for the cabinet and submitted for approval in its
Wednesday meeting.
The minister also disclosed that the government has also
slashed its wheat procurement target for the next year crop as
4 million tons will be procured against 8.5 million tons in
2000-2001.
He did not agree with the questioners that cabinet's decision
to reject the summary would send a strong negative signal to
the farmers community that the government had no interest in
their welfare as they were suffering losses in the shape of
reduced prices for their commodities. He said the purpose of
declaring the wheat target right now was to prepare the next
year wheat market for procurement so that the farmers do not
suffer the losses.
He said the government was also trying to induct the private
sector in the wheat trade so that the farmers could get better
prices of their produces. He said that was why the State Bank
of Pakistan had agreed to give concessional loan to the flour
mills owners at12 percent interest to help them procure
maximum wheat from the growers next year. He said that will
help the market to stabilise and offer a good price to the
farmers.
He said the SBP was even ready to give loan at the ratio of
60:40 to the flour mills owners to built their own storage
capacities. Similarly, he said the government was considering
a package for the investors to help them import machinery for
this purpose at reduced import rate to set up such warehouses.
He also claimed that due to government efforts, this year the
cotton prices had gone up in the recent weeks as it was being
sold at Rs1000 per 40 kg. He also stated that the other crops
like rice and sugarcane were also performing well and the
farmers were receiving good prices of their commodities from
the open market.
Courtesy The News
November 21, 2001
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