Differing estimates of wheat crop
THE Punjab government concluded its procurement on the stipulated deadline of May 30 after a purchase of 2.9 million tons of wheat, which was 600,000 tons short of its target of 3.5 million tons — and 1.1 million tons less than what it had made arrangement for and promised to extend the drive if circumstances demand so.
On time termination of the drive has, however, created a controversy about the crop size, and authenticity of the national data base and its collection methods.
The food department insists that the actual crop size in Punjab was far less than what the provincial Crop Reporting had been insisting on (17.7 million tons). The departmental assertion also means that the national yield was not 23.5 million tons as being claimed by the federation. The departmental employees base their crop size argument on three factors: inability to achieve the target, farmers’ silence throughout the procurement period, and, by and large, price stability during procurement.
In order to substantiate their point, the department claims that it was unable to meet its smaller target of 3.5 million tons, having a declared cushion of 500,000 tons more, despite liberal releases of gunny bags to ‘original and mainly small farmers.’ Some 30 days shopping spree should have been more than enough to hit 3.5 million tons target, given the fact that daily arrival of wheat reaches 250,000 tons during the peak time. It proves the veracity of departmental claim that crop size was far less than officially claimed.
Secondly, there was no hue and cry by farmers, as routinely happens every year, regardless of the departmental performance. The farmers routinely make noises every year to put pressure on the department — for increase target and daily purchase. It did not happen this year as they, especially smaller ones, did not have any surplus wheat left with them.
Thirdly, the market price, by and large, remained above Rs950 per 40kg during most of the month of May. It did slide during very early days of harvesting when moisture content was exceptionally high because of wet weather, but scaled up quickly once hot and dry weather brought it down. Apart from the moisture factor, those farmers who harvested the crop during the wet spell also had high dust content as wet soil was part of straw and thrashing. Once the weather removed both these factors, price held above Rs950 per 40kg. The farmers were expecting worse, and were content with losing smaller portion of their support price.
Ideally, the price should have been more than Rs1,000 per 40kg. The price came closer to the figure in some parts of the province, but never actually touched it.
The traducers of the department, however, have their own version. They claim that the food department was supposed to terminate its procurement drive at less than three million tons for financial reasons. This decision had nothing to do with the crop size. The food people are only deflecting the blame now to escape farmers’ wrath. Last year, Punjab had 19 million tons against 17.7 million tons this year. So, there was a cut of 1.3 million tons, and this drop was actually in the tradable surplus.
Thus, the food department had the corresponding reduction in pressure for purchase. But it went for even less because the Punjab government neither had money nor administrative capacity to hold more.
With a carry-over of 1.8 million tons, the total stocks now stand at 4.6 million tons — against total requirement of 3.2 million tons. It leaves
Punjab with a surplus of 1.4 million tons. It also knows that wheat cannot be exported because of commercial reasons. The termination of procurement drive is thus dictated by financial and administrative reasons, not because of crop size as being insisted by the food department.
To end controversies, the province needs to evolve a system of crop reporting that brings certainty and creditability to the market.
It is a fact that accuracy may appear as crucial during the period of trade surpluses. For the last few years, Punjab had been carrying huge carry-overs and not feeling pressure for accuracy of crop size. However, once shortages hit the country, the exact quantity of any crop, doubly so for one that forms national staple, becomes decisive for national well-being and decision-making.
Even when there is trade surplus, the government has to decide how much to export and how much to keep for national consumption.
Punjab has also not been feeling this pressure because Pakistani wheat has lost competitive edge in the world market due to high cost of production, and higher support price.
There are numerous variables that can change it within a matter of one season; the weather phenomenon has already proven it this year.
Punjab thus needs to develop systems that tell exactly what is being produced. Fortunately, modern technologies are there to make such reporting a reality.—Ahmad Fraz Khan