Punjab’s cash-strapped agricultural package   
 
PUNJAB’S search for donors to foot the bill for the post-flood agriculture package seems to be getting longer and longer. It does not have money to finance its ambitious programme to put farmers back on their feet.

Domestically, it has diverted all its resources to these areas but is simply overwhelmed by the scale of the tragedy. It has stopped all kinds of subsidy packages, even the chief minister’s most favourite – the low priced bread (sasti roti). It has withdrawn facility of free medical treatment to even patients on dialysis, putting their lives on risk. But nothing seems to be working, for the time being at least.

The much-trumpeted donors’ conference, which Punjab hosted on Thursday last in Islamabad, could only squeeze pledges for construction of 2,000 houses. This is the kind of bind that the Punjab government finds itself in its post-flood plans.
 

The federal government either does not have money – at least for Punjab’s spending – or it wants to spend whatever it can spare or get to derive political mileage out of it. The world donors are ignoring both the federal and provincial governments and directing money to either local or international non-governmental organisations, leaving official setups at the centre and the province to mobilise their own resources, which are simply not there.

On the other hand, Punjab has locked horns with donors like the USAID, which had allocated $25 million, but wants the Food and Agriculture Organisation (FAO) to spend the money, and directly reach out to farmers in Punjab. The provincial government wants the money but also wants it to be spent according to its own preferences, which neither the FAO nor the USAID is ready to do so far.

The provincial government also has identical issues with the federal government. The federal government had recently announced Rs31 billion package for agriculture, and pledged Rs7.2 billion for Punjab. The Punjab government again wants to spend money as per its own preferences.

Another realisation that the Punjab government must have is the fact that agriculture is as much a matter of timing as that of money. Any relief package for it cannot wait like building infrastructure in the flood-hit areas. The agriculture restoration package is currently wheat specific, which is the next big crop and main worry of the provincial government, given its financial importance in the current cropping scenario.

The wheat sowing season is just around the corner. The farmers have to sow it by mid-November to get optimum output. Any delay in that dates decreases the final yield and hit farmers.
 

At this point of time, no one is sure what the Punjab government wants to do with its wheat farmers in the flood hit areas. If the originally conceived restoration plan is something to go by, it wants to provide money for land preparation, seed and fertiliser. Of these offerings, seed and money can be given quickly to farmers because wheat stocks are available and the money can directly go to farmers.

Even in this scenario, wheat stocks have to be graded and tested for germination as both these factors are crucial. The wheat stocks are not separated according to parentage of seeds, but are just dumped in stocks. Grading and testing is also a time- taking job, and can be done relatively quickly.

The fertiliser supply would take much longer time, even months because it has to be imported and only the federal government can place such orders. The Punjab government thus has to firm up its mind about the quantity, inform the federal government, which, in turn, has to place the order. Can all this be done in a month’s time? Given the performance criterion, one can only be doubtful about fertiliser reaching farmers on time.

The reports of fertiliser hoarding have started pouring in because of the government’s plans to impose reformed general sales tax that can increase the price, officially by two per cent and unofficially God knows what. Both Urea and DAP off take, which was 14 per cent in the first three quarters as compared to last year, has, of late, picked like anything.

If the federal government does not import additional quantity, the prices would spin out of farmers’ financial reach, which the recent floods have reduced considerably.

The Punjab government should realise that only one month is left before the start of wheat season. During the month of October, it has to find a donor, ask the federal government to import fertiliser and finalise arrangements to take that money to the farmers. It is an uphill task, if not an impossible one.

Alternatively, it can start bringing the farmers expectations down by telling them about the exact financial health of the provincial government. It must come clean on what it can afford from its own resources and what it cannot. But if it continues making farmers clinge to false hopes, it would make life difficult for them. The difficulties in the distribution of Watan Cards provide a clear list of risks and allegations that such exercise can entail. It is better to avoid them, and let the farmers re-build their financial lives, as they have already started doing in case of their homes.