Government departments delaying procurement: 'Pakistan may have to import wheat next year'

Pakistan may have to import wheat next year, as the public sector organisations are delaying wheat procurement and hampering the interest of small farmers in Punjab, which contributes over 80 percent to total wheat production. This was stated by the Chairman of Agri-Forum Pakistan, Ibrahim Mughal, while talking exclusively to Business Recorder.
He blamed the federal government for the worsening situation, saying that it was backing Sindh government's unconstitutional decision pertaining to clamping ban on inter-provincial wheat movement. He urged the federal government to compel Sindh to follow the constitutional provisions and allow wheat exporters to freely enter Sindh. He added that the Sindh government was also not allowing wheat transportation to Balochistan, which totally relies on Punjab's wheat to meet its demand.
Sources in the Ministry of Food, Agriculture and Livestock (Minfal), while confirming Sindh government's decision, said that provincial government's objective was to complete wheat procurement within the province, which is why wheat movement was banned.
Sources said that due to slow wheat procurement process on the part of the public sector organisations including Punjab Food Department and Pakistan Agriculture Services and Storage Corporation (Passco), Punjab farmers are forced to sell their commodity to middlemen at Rs 800 per 40 kg which is far below the support price of Rs 950.
Pakistan this year is likely to produce around 25 million tons of wheat which will be in addition to the last year's carry over stock of 4 million tons lying with Punjab government.
The government has set public sector wheat procurement target at 6.5 million tons for 2011, but so far the government departments have only managed to purchase 1.5 million tons of wheat, out of which 1 million tons has been procured in Sindh. According to Minfal officials, the State Bank of Pakistan (SBP) has provided Rs 42 billion to Sindh Food Department as a loan for the purchase of 1.5 million tons of wheat.
The amount was distributed through five major banks: National Bank of Pakistan, Allied Bank Ltd, United Bank Ltd, Muslim Commercial Bank Ltd and Habib Bank Ltd. The federal government has allowed 3 million tons of wheat export while the Sindh government is not allowing wheat loaded trucks to enter the province, Mughal added. He said that under these conditions Pakistan would not export wheat as all the surplus stocks are lying with the Punjab Food Department and exporters have to cross Sindh to transport wheat to ports in Karachi.
When contacted, Minfal fficials said that Sindh Food Department has achieved almost 90 percent of the 1.3 million tons wheat procurement target, while procurement in Punjab has just started. According to the latest data, the department had purchased around 1 million tons by Wednesday, of which 225,000 tons have been procured from Hyderabad region, 307,000 from Mirpurkhas, 346,000 from Sukkur and 140,000 tons from Larkana region.
Tariq Mehmood, President of Punjab chapter of Kisaan Ithad said that Punjab has announced that it would procure 4 million tons of wheat this year, but it lacked funds, jute bags and area to store the new crop. The open areas and warehouses in the largest agriculture province are brimming with last year's wheat and farmers are looking for these bags before the new crop arrival.
The Sindh government has a capacity to store 700,000 tons of wheat, while additional wheat can be stored by the private sector in open areas and flour mills. Sindh Food Department established 365 procurement centres on March 15, but procurement was delayed till the drying of grains.
Growers in Sindh complained that they were forced to sell wheat at Rs 100 below the support price, as the Sindh Food Department failed to provide them with sufficient quantity of Bardana (jute bags), Mehmood said. Due to unavailability of Bardana and its selling to the middlemen, growers were getting between Rs 800 to Rs 890 per 40-kg wheat against the official rate of Rs 950. Growers in Sindh province were forced to bear an estimated loss of Rs 225 millions as they sold their produce at Rs 800 per 40 kg, which is Rs 150 below the support price.