ISLAMABAD: The government is working on a new wheat price policy for this fiscal year with focus on reducing the cost of production instead of subsidy.

Under the proposed policy, it is likely that the wheat support price, which is a form of subsidy to farmers, would not be maintained at last year’s level of Rs1,300 per 40kg.

A comparison of wheat support price in India and Pakistan, discussed at the annual consultative meeting for wheat crop 2015-16, organised by the Agriculture Policy Institute (API) on Thursday, shows that against Rs1,300 per 40kg, fixed by Pakistan, the Indian government gave wheat support price of 922 Indian rupees.

The wheat support price in Pakistan remained at Rs950 per 40kg for two consecutive years, from 2009-10 to 2010-11; thereafter it increased every year, whereas the support price in India remained in three digits throughout the recent years.

According to International Grains Council, the average international wheat price as of July 2015 was $251 per tonne as compared to $347 per tonne in 2012-13. It started to decline in 2013-14 when the price was $318 per tonne.

Chairing the meeting National Food Security and Research Minister Sikandar Hayat Khan Bosan stated that the country’s farmers were currently under stress due to higher cost of production and low prices in international market, and in this backdrop the prime focus of the new policy should be at reducing the cost of production and not the subsidy.

“It is high time to streamline our priorities with a view to devise a strategy addressing the core issue of higher cost of production and low yields.” Higher cost of production makes the agricultural commodities less competitive. The current trend is forecast to prevail in the coming years as well and it is ill omen for the farmers, he added.

The minister said that the new policy should focus on higher cost of production, low yield, subsidy mechanism, agricultural loans and competitiveness of agricultural produce. The meeting was attended by officials of provincial agricultural departments, representatives of farming community and other stakeholders.

Despite being the backbone of the economy, the share of agriculture in GDP growth declined from 25 per cent in 2000-01 to 20pc in 2014-15, and this falling situation has warranted devising new strategy to tackle the falling export of agricultural commodities.

The minister advised policymakers to review the cropping patterns, emphasising that conventional agricultural practices need to be replaced with modern agricultural technology.

Bosan asked provincial agricultural authorities to pay attention to agriculture extension, marketing and branding of agricultural commodities. Data presented at the meeting shows that Punjab has a share of 77pc, Sindh 15pc, Khyber Pakhtunkhwa 5pc and Balochistan 3pc in the total wheat production of 25 million tonnes in 2014-15.

In 2014-15, there was an overall reduction of 1.9pc in the total wheat production in Pakistan. The highest decline was recorded in Sindh which was 7.6pc, 1pc in Punjab, and Balochistan by 0.4pc.

Published in Dawn, August 21st, 2015

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