Pakissan.com; Wheat arrivals in markets drop

Wheat arrivals in markets drop

LAHORE, April 26: Wheat arrivals in traditional markets have dropped by up to 50 per cent as farmers are either holding back their crop with the hope of getting better price later in the season or selling it directly to private buyers.

According to a survey of markets in Sheikhupura, Farooqabad, Noshera Virkan and Muridke, conducted by Dawn on Friday last, wheat arrivals have not only gone down but the food department purchase centres are also struggling to meet their targets in the area.

Commission agents (arhtis) of the four markets attribute the trend to either farmers keeping crop with them to reap better profits later this year or selling it directly to private buyers from their fields.

"Up to 40 per cent profits earned by the private sector within a span of three months last year has turned farmers wise this season," said Saleem of Sheikhupura. "The farmers feel that holding up of crop would pay them enormous profits within a few months.

The increasing market trend is also making them stick to their stand; Rs2 to Rs3 are adding up in price on an almost daily basis, why should farmers should bring their crop to the market."

Mr Saleem was worried about the recovery of Rs20 million he had lent to farmers on various stages of crop maturity. "Commission agents pay farmers price of their crop in advance and recover it during procurement time. The situation is different this year," said Rafique of Farooqabad.

"Farmers are bringing only as much quantity of crop to the market as is required to clear the dues of agents. They are keeping the rest in their godowns. "The trend has also created a confusion about the exact crop size. Farmers are spreading rumours of poor crop in order to keep agents away," he added.

Mr Rafique was not happy with the government's decision to drive out agents and bring in investors. "The arhtis (commission agents) have been part of the rural economy for the last many decades.

The government's financial institutions lend only a quarter of the total requirement of Rs200 billion of the agriculture sector. The rest three quarters (about Rs150 billion) come from these agents in the shape of informal loans.

"The agents re-invest their profits in the business and meet the fiscal requirements of farmers, which the government is unable to provide because of its limited resources. "The government suddenly decided to drive out the local agents while terming them middleman fleecing growers. It introduced investors who are not part of the rural economy.

"The investors turn up for a few days, buy the crop and disappear to make profits in urban markets. They too fleece the farmers as much, if not more, as the so-called middleman but are not ready to provide fiscal services to growers as agents do.

"At present, the farmers and the agents are struggling to adjust to new realities and the whole nation is paying the price of this official adventure," he lamented. Farmers visiting the four markets had different views about the exact crop size.

Most of them were of the view that it was poor than last year's. A sizable minority insisted it was better then the last season. Allah Dita of Noshehra Virka thought that the yield decreased because of excessive heat at a very crucial stage after mid-March.

It was like a paralysis attack, which persisted only for a few days but left a long lasting impact. It skimmed off at least four to five maunds of yield and left farmers struggling.

George Masih of Sheikhupura said the crop size was not as much affected as was being projected by some. If some lost four to five maunds, the other got 10 to 15 more. Crop size in Sheikhupura and Gujranwala districts should not be a problem for official wheat managers. Heatwave hit the southern part more severely than the central part of the province, he claimed.

The food department centres at Sheikhupura, Farooqabad and Noshehra Virkan presented a deserted look in contrast with the last few years when these used to be places of attraction and activity.

The staff deputed there showed their inability to convince farmers to sell their crop at low rates. "How can we ask a farmer to sell his crop at a lesser price of Rs25 per bag," said an employee at the Sheikhupura centre.

"At present, the rate in the open market is around Rs370 per 40kg, Rs10 more than the official price. How can the centre employees convince farmers to come here? Why should a farmer holding 1,000 bags be asked to suffer a loss of Rs25,000, and why should he oblige us."

Employees of the three centres were unanimous in criticizing the government decision to increase the support price by Rs7 per 40kg. "Farmers and market opportunists took it as a panic signal from the government and acted accordingly.

It can be said that the support price should not have been increased, as it lent support to reports that crop size is not as good as the government had earlier claimed and it was ready to pay extra.

"The private sector conveniently increased the price by another Rs5. The price is going up with every passing day, keeping farmers away from the procurement centres. People at the top are taking decisions on their own without consulting those at the grassroots level," they said.

An employee of Farooqabad centre said: "Once this genie (private sector) is out, it can hardly be put back in the bottle. The government should move to tackle huge profits that the private investors make out of it.

There is no other way to stop the private sector from throwing the government out of the competition. "The investors have been given huge loans at a rate of three to four per cent by the government.

They are sure to earn 25 to 30 per cent in the next three to four months and can still use the money for another eight months. How can the government plans to compete with such an over-active and over-rich private sector succeed is anybody's guess," he asked.

An official of Nowshera Virkan centre took this correspondent to a cinema house where wheat was being stocked. "People like him (cinema owner) are taking money out of their other regular businesses to procure wheat and hope to earn huge profits in three to four months.

"The government has created an over-heated wheat economy by lending liberally to investors and ensuring unreasonable profits to them. Now the government and the public have to face the consequences," he warned.

The DAWN

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