The volatility in wheat prices is linked to crop output and the existing marketing system. As farming is not modernised, agricultural productionsuffers from vagaries of nature.

The supply chain is controlled by the middle men, many of them are speculators and hoarders. They pocket much of the gains, with the growers not fully compensated and consumers paying a heavy price for it.

Cultivators of the land also end paying up high prices of inputs for fertiliser, pesticides, insecticides etc and getting unfair prices for their output. There is a huge transfer of resources from agriculture to industry and from rural to urban area.

While the government prefers to subsidise imported wheat, it is not willing to give international market price to the indigenous growers while the inputs, some of which is domestically produced, is often sold in the domestic market at the international or regional prices. Agricultural credit is provided at a much higher rate to the farmers than the trade and industry and the small farmers have no access to formal credit.

The access to farm- to- market roads have not been fully developed and raises the cost of transportation of farm products. The absence of a network of warehousing and cold storages results in immense post-harvest losses, particularly in case of perishable items.

Agriculture has suffered at the hands of successive governments despite the fact that it is the backbone of the economy. It feeds industries with raw materials and provides rural markets for manufactured goods. No less than 44 per cent of the population is engaged in farming whose share in the GDP has dropped sharply in recent years to just 21 per cent. Rural poverty is on the increase. The trade deficit has mounted with food touching 11 per cent of the total imports of $40 billion during last fiscal year. Three million bales of cotton were also imported. The economy can be put on a sustainable path of growth by a development strategy centred on agriculture.

The government needs to focus on the next wheat crop to ensure that its target for production is met particularly because of the reports that there would a huge water shortage during the Rabi season. The question now is what would be the size of the next wheat crop? This will depend to a considerable extent on the new procurement price.

What we have in hand is not only an output crisis but also a distribution crisis as the hoarders and the market operators corner the market effectively and push up the prices at will. The administrative resolve to solve the problem has been weak and ineffective and the suppliers are able to neutralise that effectively as they have done over the years. They are able to render a surplus into a deficit through successful manipulation of the distribution system as they know the government will go thus far and not further to enforce its resolve and do the needful.

Last year when the world wheat price rose, the growers demanded the same price for domestic crop but the last government decided to provide for Rs515 for 40 kilogrammes and the farmers refused to sell it at that price. So, the new government raised the procurement price to Rs615. But the procurement drive was not successful as the open market price was much higher and the smuggling of wheat to Afghanistan and other areas continued. The new support price cannot be less than a thousand rupees for 40 kilogrammes. There is some thinking in the official quarters that domestic prices should be at par with the regional prices to check smuggling. While the growers should not be denied a fair price for their produce, given the high cost of formal and informal credit and soaring inflation, the poor and the vulnerable need to be protected. In both cases, quick remedies are essential.