THE WHEAT CRISIS
Import seems to be the immediate solution
By AMANULLAH BASHAR
July 12 - 18, 2004
The sign of wheat crisis, which hit the grain market early this year still perturbing the minds of the consumers because of the higher prices continued to affect the kitchen budget especially of the low income group which constitute majority of the population in our society.
Despite a major wheat producer of about 22 million tons a year, mainly contributed by the province of Punjab, the remaining three provinces including Sindh, NWFP and Balochistan continued to face short supply of face reflected in the flour as well as wheat prices in the market.
In fact the wheat production in Pakistan comes on top of the major crops and is suffice to cater to the need of the entire country, yet the loopholes in the market mechanism and of course other causes including greed of the hoarders, large scale holdings by some of the fuel lords having certain political considerations and above all the leakage into neighboring countries i.e. Afghanistan, Iran and India cause a vulnerable supply system in Pakistan.
Despite shortage of irrigation water the farming sector produces wheat that should be enough to meet our requirement provided the leakages created due to across the border trade was the root cause of the problem.
In order to bridge the gap between supply and the demand, the Federal Ministry of Food and Agriculture has issued especial instruction to the Trading Corporation of Pakistan (TCP) has already floated tenders initially for import of 0.5 million tons of wheat.
The tender has been issued on the instructions of Economic Coordination Committee of the Cabinet for procurement of one million tons of wheat. The bidding for the tenders will be held at TCP Head Office on July 24, 2004.
According to plan, the first shipment of the imported wheat should reach Pakistan by September. .Currently the major wheat exporting countries are including USA, Canada, Argentina, Australia or Kazakhistan.
Hopefully, the successful bidders would take a lesson from the earlier happening in which the wheat imported from Australia was infected by a fungus that is unfit for human consumption. Although there was controversy over the issue whether the imported wheat carried the fungus or not, yet the importer would naturally avoid to enter into any such deals which may cause problems both for the importer as well as the consumers. The government on its part has taken the right decision that the wheat should be allowed on the condition of pre-shipment inspection from the originating country. That decision deems fit to satisfy all the stakeholders in the deal.
Although the decision to import what was taken much earlier, yet it may be described the lethargic attitude of the people responsible for the job that we are still evolving the strategy for the import of the much sought after commodity. However, according to sources, the entire shipment of the imported wheat should be completed by December this year.
The official quarters including the Minister for Food and Agriculture, however, hold the opinion that there was no shortage of wheat in the country and the steps were under way to further improve the situation through food security mechanism by strengthening it through import of at least one million tons of wheat this year. The ministry sources say that the wheat production this year remained up to the target, however, procurement target could no be achieved due to more aggressive buying by the private sector taking advantage to offer higher prices to the growers.
In a way, getting better return of their hard labor was good for the farm sector and the growers, as it is the market forces, which mobilize the opinion of the growers to give more attention to the crop which is much in demand. What it is good on one side, it causes problem on the consumers end, as the private sector naturally like to have increasing profits on the investment.
Meanwhile then province of Punjab which plays a key role in the agriculture sector of the country, has rightly pointed to the growers to cultivate demand-oriented crops to get better earning and improve agriculture marketing system.
Practically speaking, Punjab is encouraging cultivation of demand-oriented crops to bring stability in the agriculture marketing, however, to create a culture of cooperation between the government and the growers, an opinion building campaign would have to be launched for the purpose to achieve the desired goal.
For the education of the farmers there is a need for establishment of an education cell for the farmers for timely information regarding the demand of the market both locally as well as in the international market. This sort of educational support to the farming sector would do a wonderful job to get better return of the time and toil of the growers in Pakistan.
A word of advice to the traders: it is true that economics rules interest of the traders, yet humanity, honesty and of course love for the countrymen is something which should also carry weight in the business ethics of our traders. It is highly painful to see that in case of any crisis or eventually, our business community becomes so cruel to take undue advantage of the situation without giving any consideration to the fact that majority of the poor living in this country are their brothers and we should add fuel to fire by squeezing the people whose buying power has already been harshly eroded by the price inflation.