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A need for farmer-friendly wheat
policy
By Asmat Ullah
EVERY government faces a challenge in selecting an optimum
policy to provide food supply to consumers at a reasonable
rate and maintaining a nutritional standard.
 Though
the best solution, in the long run, would be to increase
production through technological advancement, at the same
time alternatives available for the short run are an
interruption-free market, imports, input subsidies and price
support.
In Pakistan the objectives of wheat marketing policies are:
To achieve food security, provide wheat at a low price to
consumers, assure reasonable price to growers, and boost
production.
The policies adopted to achieve these objectives were to
assure minimum price to growers through floor price
mechanism and provide fertilisers and subsidised irrigation
to growers.
Wheat production in our country can be divided into three
distinct periods: The pre-green revolution period, before
the release of high-yielding verities (1948-66). The green
revolution period, when modern inputs such as high-yielding
varieties, fertilisers, and irrigation were rapidly used
(1967-76) and the post-green revolution period when
additional gains of modern inputs slowed down considerably.
The average growth rate of wheat per annum during the
pre-green revolution, green revolution and post-green
revolution periods were 1.50 per cent, 5.1 per cent and 3.3
per cent respectively. During 1948-1966 increase in wheat
production was achieved through increase in cultivation
area. The trend was reversed between 1967 and 1976 when
technological changes played a major role in enhancing wheat
production. Since 1977, however, the rate of yield growth
has slowed down.
There are two distinct periods with regard to the
government’s intervention and adoption of policies to ensure
wheat supply in the country. In the first period until 1971,
the prices were kept higher than in the international market
at wholesale level. After that, during 1970s and 1980s there
seem two objectives of the government’s food policies.
1. To keep domestic wheat prices lower for the urban and
landless rural poor.
2. To discourage private sector involvement in wheat
services sector, such as wheat storage, transportation and
distribution.
Fixing wheat flour prices by the government and involving
itself in wheat marketing is a mechanism to provide
reasonable farm gate prices to farmers. The guaranteed
minimum price fixed and announced during growing season, and
procurement price variables depend upon market condition.
It is interesting that guaranteed minimum price (GMP) has
mostly been lower than market price. To discourage the
private sector involvement in wheat marketing, a narrow
margin between farm gate and release price to flour mills
was maintained. Furthermore, no difference in release price
in different regions and different time was kept. The
ultimate result was interdiction of private sector to bid
prices up to equilibrium level, which created an inefficient
marketing system.
Below equilibrium prices of wheat and wheat flour naturally
create a gap between supply and demand, force the government
to import around million tons of wheat per year to fill the
gap. To keep domestic price lower than import parity price
by subsidising the latter equal to difference in
international and domestic prices has become a common
practice.
Agriculture in our country has been subjected to high degree
government influence and intervention since long. Because of
the importance of wheat, there has been wrong government
involvement in the wheat sector since the late 1950s.
Inter-provincial and inter-district ban has become an annual
routine in order to facilitate government procurement of
wheat from surpluses up to 2004-2005.
A combination of sector specific trade and micro economic
policies in our country are said to be used as an effort to
maintain low consumers prices, to achieve price stability
for farmers and to support the agricultural processing
industries. As a matter of fact wheat prices in the country
have always remained low relative to import prices.
Therefore, foreign producers and flour millers’ rather than
consumers receive much of cheap wheat. The flour millers
have always enjoyed quotas of purchase of government-subsidised
wheat below market price and then have been able to sell the
flour at market prices. In order to promote wheat marketing
efficiency, it is important that import and sales should be
planned and announced in advance.
The APCOM recommends fixation of support price for wheat,
each year before planting season. The reason behind it is to
increase production and protect farmers from cost increased.
But due to mismanagement, the desired results could not be
achieved, and the country faced the crises, thus compelling
imports. It was an important breakthrough in 2000 when
Pakistan entered into export market and became a potential
competitor of India in the Gulf and the Middle East markets.
Again the crises have emerged in the country.
What is needed to be understood by our policy-maker is that
prolongation of non- farmer-friendly policies neither help
our farming sector nor create inter-provincial harmony or
work for the well-being of the common man. Despite having a
strong agricultural background, Pakistan has not been able
to attain self-sufficiency in wheat because of the failure
of agricultural policies. The government has neither
achieved food security nor has the common man been spared
from paying high prices.
To overcome such problems, the government should begin
“farmers’ support education programme” about mechanical
reaper, binders and improve the storage facilities that can
help in reducing the pre- and post-harvest losses and also
reduce the cost of production.
There is a need on the part of the government to make such
policies that encourage production at low cost.
Keeping in view the increasing consumption of food grains,
there is a need to bring the huge acreage of wasteland under
cultivation. The government should launch farmer-friendly
policies and cut official levies on seed, fertilisers and
weedicides to facilitate the farming community compete in
the international market.
Courtesy: The DAWN
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Pakissan.com;
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