MULTAN: Will wheat price increase help boost production?
MULTAN, Oct 4: Can an enhanced price and nothing else help boost the wheat production in the country to attain self-sufficiency is a question being widely discussed among the agriculturists in the area.
The federal government has recently announced the official wheat procurement price for 2004-05 as Rs400 for 40kg, after incrementing it by Rs50. It was Rs350 last year. Increase in wheat price has always been a controversial issue.
If the agriculturists want it to be enhanced every year in the light of price hike in input, a vast majority of the population, which has to buy wheat or flour from the open market to fulfil its staple food needs, does not like the idea obviously.
After the military take-over on Oct 12, 1999 the ousted civilian government had enhanced the wheat procurement price to Rs265 for 40kg from previous Rs240 for 40kg. Immediately after taking over the affairs, the military government found itself in a difficult situation owing to countrywide protests by the cotton growers against lowest-ever phutti (seed cotton) prices.
To lessen the pressure, the then greenhorn Musharraf government announced a further raise of Rs35 in the wheat price, thus bringing it up to Rs300 in 1999-2000. Therefore, the wheat growers were given a 25 per cent raise in one year.
The country harvested an all-time high production of 21.8 million tons of wheat in 2000, which was not only sufficient for the domestic demand but there was also an exportable surplus. However, in the following three years the production again fell down below the domestic requirement for the commodity.
As there was no increment in the official procurement price since the one announced in 1999-2000, the policy-makers in the federal ministry of food, agriculture and livestock increased the wheat procurement price to Rs350 for 40kg, anticipating that the increment would again do a miracle for them. But, the results were not as expected.
According to the official figures, the total wheat production in 2003-04 was just 19.667 million tons. The output was less then the previous year's (2002-03) production of 19.83 million tons despite the fact that the area under wheat this year was more than it was in the previous year.
Hence, there are two different experiences with the price increase. Observers say that in the former period the area under wheat was 8.46 million hectares while in the latter it was 8.17 million hectares.
Moreover, the inputs like irrigation water, fertilizers and herbicides were available in abundance at reasonably fair prices in the former period while in case of the latter period the irrigation water was available scarcely and fertilizers and other farm chemicals were being sold in the black market.
The situation for the coming wheat sowing season is even grimmer, as water for irrigation purposes will hardly be available in canals due to depleted reservoirs. Besides, DAP and urea fertilizers have been hoarded by the profiteers ahead of the Rabi season.
In the recent years, wheat herbicides have become an import input, especially in the Punjab, to weed out herbs that effect adversely the per acre yield of the crop. However, the popular products in the herbicides have been monopolized by a couple of pesticide firms despite the fact that their patent rights have long been expired.
Last year, it was the popular demand among the wheat growers to ensure availability of herbicides at affordable prices. However, the pesticide firms enjoying monopoly-like situation over the marketing of the herbicides manoeuvred successfully to get delayed the notification about import of wheat herbicides under the category of free for all to import (form-16) under generic name.
The SRO-45 in this regard was issued in March when the period for application of wheat herbicides had been expired. But, the monopolists succeeded in getting the SRO-45 scrapped when a controversial SRO-399 provided three-year indemnity to the herbicides registered with the influential firms.
Sources said although the implementation on the SRO-399 had seized by the authorities, the department of plant protection had endorsed the indemnity through another SRO-77(KE)/2004 issued in July this year.
Analysts say that mere increase in price cannot boost wheat production because a multi-pronged package is needed and that should include subsidized electricity and fuel to over come the shortage of irrigation water by running tube wells, availability of fertilizers and herbicides in abundance at affordable prices and assurance that the growers will get the officially announced procurement price.