LAHORE, Oct 8: The government is considering to increase the wheat support price by Rs50 per 40kg, sources in the Ministry of Agriculture, Food and Livestock claimed here on Wednesday.

The Agriculture Price Commission of Pakistan had recommended a price of Rs365 per 40kg for the next year, but the government favoured Rs350. A summary to this effect was moved last Monday and a decision is expected by Oct 15.

The current support price of wheat, Rs300 per 40kg, was fixed by the Nawaz government towards the end of his regime four years ago, and the decision was subsequently implemented by the Musharraf government.

Farmers have since been demanding an increase in the support price due to a substantial increase in the price of inputs and imposition of the general sales tax. The government has been resisting the pressure for the fear of social chaos.

Of late, the pressure has increased for a number of reasons, the sources maintained, not only because of heavy taxation of inputs but also due to a possible decrease in the acreage next year, which would raise the spectre of costly imports. Due to the feared shortfall in the production of cotton this year, the farmers could delay picking till the last moment to improve yield. The start of sugarcane-crushing season is also uncertain. Both these factors could delay the vacation of fields for wheat and decrease acreage and production.

These factors, coupled with the increasing price of wheat in the world market which has already hit $165 to $170 per ton —- Rs400 per 40kg —- have reportedly forced the officialdom to revise the price. In addition to this price, there are international and inland transportation and port charges. The possibility of importing wheat next year has scared the government into taking pre-emptive action and increasing the support price.

“The sudden hike of Rs50, if approved, could benefit the farmers but only at the cost of urban middle class,” says a Lahore dweller. Instead of increasing the price so heavily, the government should try to reduce taxes on inputs and provide a relief to the farmers on that account. The increase would enhance the flour price by at least Rs60 or 70 per kg.

“The government could have progressively increased the wheat price over the last five years,” says a farmer from the central Punjab. It first delayed the decision unreasonably and had now decided to make up for the lost time and money. It must try to be reasonable, and try to correct its perspective on the issue, he insisted.

On the other hand, a member of the Farmers Associates Pakistan maintained that heavy increase in the support price had become necessary because the government was not ready to adopt the other measures that could reduce the cost of production. It has not been able to reduce prices of fertiliser in spite of providing the industry subsidized gas. It has also refused to withdraw the general sales tax on inputs and has not been able to come up with new varieties of seed that could enhance the per acre yield. The drought further increased the cost of production. All these factors leave farmers with no choice but to demand an increase in price, he said.