Delay in opening of wheat procurement centres

By Mohammad Hussain Khan

Photo by AFP
Photo by AFP

With the delay in setting up of procurement centres in Sindh, new wheat crop is selling below official support price of Rs1200 per 40kg in the market.

According to Sindh Food Director Talib Magsi, procurement will begin by April 1. However, procurement centres have yet to be set up following reports that new crop’s arrival would be delayed this season. Going by Sindh agriculture department’s estimates, the province is likely to harvest a bumper crop.

Brokers in Hyderabad, like Vishnu Mal, point out that a 100kg wheat bag was being sold for Rs1,100 per 40kg until March 27, the price falling from Rs3,100 on March 1 when crop had started arriving.

The cost includes transportation and labour charges. This indicates that farmers must have sold the crop for around Rs900 per 40kg or so. Growers complain with present market price trends, they are at the losing end.

The brokers deliver the wheat to millers or chakki owners. Usually, they sell the crop for a higher price — say for Rs20 or Rs30 per kg — to chakki owner since the latter is choosy about the quality of grain. Generally, two types of qualities are always available in the market: a superior quality for chakki owners and slightly inferior quality for flour mill owners. Presently, chakki owners are buying a wheat bag of 100kg at Rs2780.

“About 10 to 15 vehicles reach Hyderabad food grain market on a daily basis but the arrival of crop will pick up pace soon”, claims Vishnu Mal. Since government has not started purchasing the crop, its price is on lower side and will remain so till the procurement by food department begins. A truck normally carries 120 to 150 bags of 100kg of wheat each while a big trawler carries 250 to 300 bags.

“Since the government has not set up procurement centres, farmers will incur a loss of Rs3.63 billion by the time the actual buying begins on April 1. The middlemen are paying Rs900 or less to farmers because they are in the position to exploit us”, says president Sindh Abadgar Board, Abdul Majeed Nizamani.

Expecting a bumper crop this season, Nizamani remarks: “People didn’t go for sunflower cultivation due to seed-related problems this year, and the area vacated has been substituted with wheat sowing”.

Given reports of wheat production he received from different parts of the province, he expects that the production will touch 4.4 million tonnes mark and that’s why he says procurement should start as quickly as possible. Nizamani also insists that procurement centres should be increased by one-and-a-half times as compared to last year for the benefit of the farmers.

Food department officials counter that since crop’s arrival was expected to be delayed due to prolonged winter,
procurement centres were not set up.

Director General Research Atta Soomro argues that delay in crop’s arrival by eight to 10 days is negligible and adds that winter always benefits crop.

A wheat grower from Matiari Haji Nadeem Shah claims that the brokers are purchasing wheat at Rs1,000 per 40kg while expenses of transportation and gunny bags — around Rs70 per 100kg — are borne by growers. “Not only that, growers are required to give 2kg wheat more to brokers; we are actually being paid Rs1000 for 42kg and not 40kg”, he adds.

Despite a bumper crop, the food department has no plans to increase either the number of procurement centres or procurement target. Roughly, 1.3 million tonnes of wheat will be purchased from farmers given storage capacity of the food department. Source DAWN

Published: Zarai Media Team

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