High input cost, low profit: Country may miss Kharif crops target

May 26, 2013



Country is likely to miss the target of Kharif crops due to high input cost and low profit, officials of Ministry of Food Security and Research said. According to a senior official of the ministry, Pakistan is not likely to achieve the set target of cotton, maize, rice and sugarcane during this Kharif crop season.

He said that during the past five years cost of doing agriculture has registered a significant increase as urea price increased from Rs 800 per 50kg bag to Rs 1800 per 50kg bag; electricity price increased from Rs 3 per unit to Rs 6 per unit and diesel price went up from Rs 40 per litre to Rs 106 per litre. He said that especially in the past two years 2011-12 and 2012-13 Pakistan missed production target of the most important crops, i.e. wheat, rice, cotton and gram, while in the same period the cost of crop production increased by 30 percent.

Prices of cotton, rice and sugarcane were low last year in international as well as local markets due to which farmers are likely not to cultivate these crops and would prefer to cultivate sunflower and other crops. Last year world-wide production of these crops was abundant and due to which there was no gap between supply and demand which also impacted on the prices of these commodities.

Indian Basmati has replaced Pakistani Basmati in the international market, as a result Pakistan”s Basmati export remained below the target due to which the country lost valuable foreign exchange. Production of major crops including paddy, wheat and cotton lint of the country is witnessing a decline in production due to skyrocketing input costs. During the past few years, Pakistani rupee value against other currencies has sharply declined, which has also made farm inputs correspondingly expensive. Resultantly, the food security situation of the country worsened.

In 2010-11 and 2011-12, Pakistan missed production targets of important crops such as cotton, rice, maize and sugarcane due to devastating floods, but this time around the country is going to miss targets of these crops due to mismanagement in the relevant departments and high input cost. Furthermore, small growers are unable to get sufficient loans from the public sector banks as well as private banks.

The country missed production targets of all major crops. Against a target of 25 million tons of wheat, 23.45 million tons of wheat was produced in 2012 and in 2013 the country”s wheat production is around 24 million tons against set target of 25 million tons. This drop of 1.5 million tons and 1 million tons cost the farmers around Rs 85 billion.

Similarly, cotton also lost around 1.5 million bales – 13.58 million bales against a target of 15 million bales in 2011-12 and about 13 million bales in 2012-13, this was another loss of Rs 120 billion to the farming community. Rice crop has dropped to 6.2 million tons against 7 million ton so this loss of over half a million tons paddy crop also caused a loss of Rs 34 billion in the past two years to farmers. Gram production came down to 250,000 tons from 550,000 tons during last three years. These 300,000 tons translate into a loss of Rs 28 billion a year. Put together, these fours crops hit farmers by around Rs 400 billion in the past two years. Business Recorder

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