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The Competition Commission of Pakistan (CCP) has observed that acute shortage of wheat straw in the country has adversely affected the paper, dairy and meat industries and recommended a complete ban on the burning of wheat straw in the fields and use of it as a fuel for producing power.

"The non-availability of wheat straw has led to the closure of seven paper mills. This is an alarming situation since it not only affects livelihoods of persons associated with these units, it also has repercussions on competition in the sector since only two mills producing good quality paper from imported wood pulp remain operational," the CCP observed in its Opinion issued to the provincial governments.

In November 2019, the CCP held an open hearing in Lahore for consulting with the stakeholders on the issue. The participants, particularly the representatives of paper mills and dairy sectors, complained of the acute shortage of wheat straw and called for a complete ban on its burning.

The Competition Act empowers CCP to hold open hearings on any matter affecting the state of competition in Pakistan and express publicly an opinion with respect to the issues.

The CCP added that there will also be a profound impact on public procurement and education budgets as provincial textbook boards procure mostly from local industry which produces low quality paper for printing of course books for students of government schools.

"This demand would now have to be catered through imported paper which will substantially increase cost and impact the country's foreign exchange reserves. Educational products will become more expensive placing a huge burden on education budgets as well as the common man," said the CCP's Opinion.

The CCP has also opined against the use of wheat straw for generation of power. "We are cognizant of the fact that the GoP under the Alternate Energy Development Board's Policy for Development of Renewable Energy for Power Generation, 2006 encourages the generation of power through the use of renewable energy sources to bring in energy security and improve the energy mix of the country. However, we are of the opinion that this should not be at the cost of depriving the essential sectors of an important input, i.e, wheat straw without which their survival is at stake," said the Opinion.

Furthermore, the CCP said that for the purpose of biofuel/bioenergy various alternates to wheat straw should be utilized. These residues are in surplus and are equivalent to or have a higher energy potential than wheat straw which include rice straw, cotton stalk, bagasse, sugar trash and maize stalk etc.

The CCP noted that internationally various jurisdictions have formulated comprehensive strategies to manage this scarce resource in order for its optimal utilization. "Based on the urgency of the matter as a short term measure, we recommend that the respective provincial governments should out-rightly ban the burning of wheat straw on the field and as fuel."

The CCP re-emphasized that meat and milk are notified as essential products and their prices are fixed by district governments. Since wheat straw is a major input for these sectors, it is imperative that its hoarding should be prevented. Under their respective Registration of Godowns Acts, the provincial governments of Punjab and Sindh may direct their Agriculture Departments to maintain records with respect to movement of wheat straw in and out of the godowns. Provincial Governments may take immediate action against any elements involved in hoarding under the relevant laws.

The CCP concluded that in the long term, based on international examples, the GoP needs to formulate a comprehensive policy for the effective utilization of crop residues including wheat straw which needs to ensure that it is readily available at a reasonable price. The GoP needs to encourage research & development to find innovative solutions to reduce wastage of wheat straw which currently stands at 40 percent. Reduction in wastage of wheat straw along with other crop residues would enhance their availability to be utilized as bio fuel.

Copyright Business Recorder, 2019