KP sees a bumper harvest

KP sees a bumper harvest
By Tahir Ali

http://www.dawn.com/2012/01/02/kp-sees-a-bumper-harvest.html

OFFICIALS of the agriculture department in Khyber Pakhtunkhwa say the province produced bumper sugarcane, maize and rice crops in the Kharif season and it hopes a good Rabi harvest on the back of more cultivation of wheat on arid lands throughout the province.

In the current Kharif season, the province had a bumper sugarcane crop, cultivated over an area of 94,370 hectares that produced 43,25,483 metric tons of cane. Land under cane cultivation and its production increased by 6.75 per cent and 7.35 per cent respectively against the previous year.
“The increase was because of a couple of factors. Plenty of standing cane crop had been devastated by floods in the preceding year. As the prices of sugar and gur went up in the last season, farmers went in large numbers for the crop this year. Then, many flood-hit lands were reclaimed either by the government or non-governmental organisations and the farmers themselves.
A blessing in disguise, the floods laid a healthy mud-layer over them on which cane was cultivated. Thus land under the crop as well as production increased,” said Siraj Muhammad, deputy director information, agriculture department, Khyber Pakhtunkhwa.
Average per acre yield (PAY) in the province is between 16-24 metric tons (400-600 maunds), much lower than Sindh and Punjab and research stations which produce up to 32-40 tons.
Responding to a question on the less per hectare yield in the province, he said though quantity-wise Sindh and Punjab had better PAY, quality-wise KP’s cane was better as it had better sucrose level.
Another official, who wished anonymity, said the yield could not be increased when there was no liaison with farmers and no coordination between the farmers, and when most farmers resort to intercropping of wheat and cane, use less than the recommended seeds etc.
On maize performance, he said KP had cultivated the crop on 4,42,322 hectares, up by 4.6 per cent than last year and produced 8,04,575 metric tons, up by 8.6 per cent than last year. He said Swat, Dir and Mansehra were the biggest quality maize producers though it was also sown in Mardan, Peshawar, Charsadda and Swabi.
“While the PAY in KP is less than in Punjab, the farmers in the latter province grow mostly hybrid varieties and that too the spring crop wherein the crop gets more time and better climate to develop. Hopefully the trend of using high yielding hybrid seeds is gaining momentum in KP too which will increase total output and PAY in the coming seasons,” he hoped.
According to him, “KP had its rice production increased by 10.85 per cent to 86,471 metric tons and the rice acreage by 4.8 per cent to 48,351 hectares over last season. Swat and Charsadda are the biggest rice producers. Farmers in these areas had reclaimed their lands and cultivated rice on vast tract,” he added.
To a question that vast lands in Batkhela that were used for growing quality rice were still covered with sand and were uncultivable, he said it was because the farmers there utilised the riverbeds and its catchment areas for the purpose which were retaken by floods.
Though Muhammad had no data on the land under wheat cultivation for this year as according to him, wheat growing still continued in parts of the province and may go up to the first week of January, he said wheat was grown on 7,58,738 hectares producing 11,52,470 metric tons last year.
He was hopeful for the next wheat crop in the province, particularly in the rain-fed areas, saying that last year wheat production target surpassed because of rains. Though the meteorological department had forecast rains in December, the continuing dry spell has exposed wheat cultivated in arid lands on hundreds of thousands of hectares to dangers.
The wheat crop in rain-fed areas, especially in southern districts of KP where wheat is overwhelmingly cultivated on arid lands, has been attacked by termite. However, he downsized the danger saying there wouldn’t be any danger to the standing crop even if a light drizzle came down as has been forecast for the first week of January.
“In October this year, it had rained heavily which was not the case last year. Taking advantage of the soil-moisture for these rains, farmers cultivated wheat on vast areas of lands more than the preceding season this year and lush green wheat fields can be seen. The arid lands, which account for around 60 per cent of wheat cultivation areas in the province, are expected to produce bumper wheat crop this year,” he claimed.
Termite usually attacks and destroys wheat crop for lack of soil moisture, increased temperature and failure to treat seeds with anti-termite drugs before sowing.
“The situation in irrigated lands, accounting for 40 per cent wheat acreage, is even better. But farmers need to irrigate their lands before the canals are closed next week for desalination purposes. They should give enough attention to weeds control and use the required amount of suitable fertilisers to get bumper wheat crop,” he suggested.

Swat wanluts await proper care

Swat walnuts await proper care

By Tahir Ali

http://www.dawn.com/2011/12/26/walnut-trees-need-proper-care.html

SWAT accounts for around 50 per cent of walnut trees in Khyber Pakhtunkhwa. But the lack of official support and negligence, deforestation, non-plantation of new trees and attack of stem-borer has endangered this great agricultural asset, farmers say.

“Walnut trees in the area, especially in the Madyan valley, are hit by stem-borers which penetrate deep into their stems, eat them up and eventually lead to the death of the tree. Porcupine also eats the nuts when they are sown. But these are curable phenomenon. Many farmers are unaware of these problems.”

Shah Abdar, a Swat-based farmer, says walnut is sold between Rs5,000-12,000/50kg in the market depending upon their size and quality.

“ Given support from the government, walnut could be a bigger source of income for the area people. An ordinary family in upper Swat owns on an average 3-4 walnut trees. A single tree yields around 100-300kg of nut which by the current market price of about Rs10,000/50kg earns the family around Rs80,000-240,000,” he said. The forest department every year runs tree plantation campaigns but no progress is visible on the ground.

“The reason for this is absence of personal ownership. The seeds or saplings cultivated are often destroyed as there is no sufficient care. The government needs to provide expert advice, walnut saplings and seeds, pesticides/insecticides to farmers to grow more trees. In the hope of large returns, they will do whatever possible to keep it safe and healthy,” he says.

Hundreds of tons of walnut are produced in Bahrain, Kalam and other valleys of Swat, but the real potential of the nut in the area is far from being utilised.

“Swat is the best place for growing walnut. The tree usually grows on ridges of mountains, in the gorges and river-banks and thus doesn’t impact the already less arable land. But despite being the main asset and source of income of the family, the number of walnut trees are on the decline and only about 5-10 per cent of the potential in the area has been utilised so far,” he said.

In 2005 walnut production in Swat was 4,963 tons, which jumped to 6,973 tons in 2006. But in 2008, after the spread of militancy in the area, it dived to 3,960 tons.

“Though main roads in the area have been repaired to some extent making communications possible, link roads to far flung areas in the valley remain damaged making them inaccessible. It leaves the poor with no choice but to sell their trees to fruit dealers on meagre prices,” he said.

Malakand division accounts for around 90 per cent of the provincial land under walnut trees and grows thousands of tons of nut in Chitral, Swat, Lower and Upper Dir, Kohistan and Shangla. Nut of different sizes, quality and colours are produced here and marketed.

Saeedur Rehman, another farmer said the kernel of walnut depending on its quality and taste is sold at Rs30,000-35,000/50kg in the market. The brighter the kernel, the better is the price,” he said.

He was particularly unhappy over cutting of young trees for getting “Dandansa”. The bark and roots of the tree used as Dandansa, which is smuggled to neighbouring countries, ” he said.

Walnut is beneficial to health. Experts say it stimulates brain and is believed to be useful in treatment of stomach, liver and kidney diseases. It is recommended for cardiovascular diseases and high blood pressure. Walnut helps control cholesterol level, strengthens walls of blood vessels and prevents diabetes, supports immune system, helps improve memory and speeds up recovery after serious operation.

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Walnut population short of potential

By Tahir Ali

Swat accounts for around 50 percent of the provincial walnut population and has around 500 hectares out of the total 1000 hectares under the walnut trees. But lack of official support, negligence of the concerned departments, continuous deforestation of the existing trees for getting ‘Dandansa’ and other purposes, non-cultivation of new ones and some ailments (stem-borer), ignorance of farmers and porcupine attacks have endangered this great asset,  farmers say.

“The walnut trees in the area, especially in Madyan valley are hit by stem-borer which eats up the stem eventually drying the tree. Porcupine also attack the seeds when they are planted. But these are curable phenomenon. The problem is most farmers are unaware of this,” said a farmer.

Shah Abdar, a Swat based farmer, said salnuts are sold between Rs5000-12000/50kg in the market depending upon their size, health and hardness or softness of nutshell.

“Subject to a little patronage and support from the government, walnut could be the greatest source of income and asset for the area people. An example will illustrate the point. An ordinary family in upper Swat owns on average 3-4 walnut trees. A walnut tree yields between 100kg-300kg of walnut fruit which by the current market price of about Rs10000/50kg earn them about Rs80,000-240,000,” he said.

The forest department, he said each year runs tree plantation campaigns but there is no progress on the ground.

“The reason for this is absence of personal ownership. The trees so cultivated are often destroyed by the people as there is no sufficient care and security for them.  The government and non-governmental organisations need to provide expert advice, walnut plantlets/seeds, pesticides/insecticides to farmers to grow more trees. It is only when the people will be provided plantlets or seeds and they grow it in their lands that the problem will be solved once and for all. In the hope of huge returns, they will do whatever possible to keep it safe and healthy,” he argued.

It can have great financial benefits for the poverty/militancy/floods-stricken farmers.

“Its financial benefits could be judged from the fact that there are around 5 big walnut tree is one canal of land. Farming families usually own less cultivable but much more non-cultivable lands in Swat. If we take the average land per family at 50 canals (around 6 acres) and the family grows walnut trees on it, it can become millionaire within no time. Just leave the 300kg yield per tree, even if the per tree yield is just 50kg, it will earn the family around Rs2.5million at the current market rate,” he opined.

He said hundreds of tons of walnuts are grown in Bahrain, Kalam and other valleys of Swat adding that the potential of walnut in the area is far from being utilized.

“Swat is the best place for walnut. The tree usually grows on mountain ridges, in the gorges and river-banks and thus doesn’t impact the already less arable land. But despite being the main asset and source of income for the family along with fruit, vegetable and livestock, the number of walnut trees has been on the decline and only about 5 to 10 per cent of the potential in the area has been utilised so far,” he said.

“Though main roads in the area have been repaired to some extent and communication made possible, the link roads to far flung areas in the valley are still inaccessible. It leaves the poor people with no choice but to sell their standing walnut trees to dealers on meagre prices thus incurring losses,” according to him.

Mlakand division accounts for around 90 per cent of provincial land under walnut trees and grows thousands of tons of walnut in Chitral, Swat, Lower and Upper Dir, Kohistan and Shangla.

Walnut of different sizes, quality and colour are produced here which are marketed in whole form or only its flesh, taken out and packed, is sold in the market.

Saeedur Rehman, another farmer said the walnut flesh, dependent upon its colour and taste, is sold at Rs30-35000/50kg in the market. The more the brighter the flesh, the better is the price. And the cooler an area, the more standard and delicious the walnut flesh,” he said.

He was particularly unhappy for cutting the walnut tree for getting “Dandansa”. “The problem is for Dandansa you have to cut down the younger trees whose stem-cover and roots are the best for the purpose. Even though it is unlawful to get Dandansa, its smuggling continues unabated which needs to be controlled,” he said.

Walnut has been found to be extremely beneficial for health. Experts say it stimulates brain and is believed to be useful in treatment of stomach, liver and kidney diseases. It is recommended for cardiovascular diseases and high blood pressure. Walnut helps control cholesterol level, strengthens the walls of blood vessels and prevents diabetes, supports immune system, helps improve memory, speeds up the recovery period after a difficult operation or trauma.

Walnuts in malakand division

Growing nuts

There is a great potential for planting walnut trees in Malakand and other areas of Khyber Pakhtunkhwa

By Tahir Ali

http://jang.com.pk/thenews/dec2011-weekly/nos-25-12-2011/pol1.htm#5

The Malakand Division, according to one estimate, accounts for roughly 95 percent of Khyber Pakhtunkhwa’s walnut yield. Walnut of different sizes, quality, and colour are produced here which are marketed in whole form or its flesh taken out and packed, and is sold in the market. What is being done to increase the yield of dry fruits after the militancy days are over?

In Dir, these days per kilogramme prices of different qualities of walnuts range between Rs100-250 for whole and Rs400-700 for walnut flesh, of pistachio between Rs600-800, of almond Rs150-400 and chilghoza being the costliest of all with Rs1400, according to Saeedur Rehman, a dry fruit dealer in Dir.

Rehman says chilghoza (pine-nut) prices have surged to over Rs70,000 per 50kg (Rs1400) in the whole sale market and it may be sold around for Rs1500-1800 in the open market after adding the transportation charges, dealers’ commission, shopkeepers’ profit and imposition of various taxes.”

Contrary to the general impression, he says, militancy hadn’t badly impacted on the dry fruit production and businesses and opined that prices have come down as compared to last year.

“Prices of whole walnut were around Rs13-14000-50kg last year but this year these have come down to Rs11-12000. It is because there was bumper production this year. While we still have last year’s stock, the produce for this year has arrived in the market.” He believes, “There is no hope for the price-surge as the market is sluggish at the moment. The government needs to make arrangements for purchasing and exporting the commodity. I am sure the country would earn a lot of money in the global dry fruit market by exporting this quality commodity.”

He says, “The price of walnut, a Dir speciality, ranges between Rs5000-12000 per 50kg while that of its pure flesh ranges between Rs22000-35000-50kg. Walnut from Barawal and Bamboret are liked for their big size and taste. The brighter the fleshy part, the higher the price. And the cooler the area where it is produced, the better the taste and quality of the walnut,” he adds.

The sale of the walnut flesh fetches more income for the dealers. That is why people in Dir, rather than selling standing walnut trees or the whole fruit with cover, have started taking out its flesh and packing and selling it. A 50kg sac of whole walnut produces around 22-25kg pure fruit which fetches around Rs22000-35000 in the market, much higher than the whole fruit prices.

The importance of the walnuts cannot be overstated. Dry fruits and winters go hand in hand. While watching movies, reading books or newspapers or partying with friends, dry fruits help warm the body. Dry fruit are not only health-friendly but are also taken as gifts to friends and officials in beautiful packing. But skyrocketing prices are making them an unaffordable luxury for the majority.

Hundreds of tonnes of walnut, pine-nut and other dry fruit are produced in Dir and surrounding districts. Barawal, Dir Kohistan and Garam Chashma, Bamboret and Bony valleys in Chitral produce the best walnut and pine nut. The walnut from Nooristan Afghanistan also reaches the local market.” Experts say walnut helps improve memory, is useful for treating stomach, liver and kidney diseases, for cardiovascular diseases and high blood pressure. It helps control cholesterol level, strengthens the walls of blood vessels and prevents diabetes and supports immune system.

Lack of official support, negligence of the concerned departments, continuous deforestation of the existing trees for getting ‘Dandansa’ and other purposes, and non-cultivation of new ones have badly affected the produce.

The government should provide technical advice and support to grow more walnut trees as these are depleting and about 90 per cent of the potential in the area is yet to be utilised.

Rehman was particularly unhappy over cutting walnut trees for getting “dandansa”. “The problem is for dandansa you have to cut down the younger trees whose stem-cover and roots are the best.

Shah Abdar, a Swat-based grower of walnut, says hundreds of tons of walnuts are grown in Bahrain, Kalam and other valleys of Swat, adding that the potential of walnut in the area is not being explored.

Swat is the ideal place for walnut. It usually grows on mountain ridges, in the gorges and river-banks and thus doesn’t impact the already less cultivable land. Walnut could be the greatest source of income for the area people. But despite being the main asset along with fruit, vegetable and livestock, the number of walnut trees has been on the decline and only about 5 to 10 percent of the area in Swat suitable for walnut is utilised..

“The reason for this is absence of personal ownership. The trees so cultivated are often destroyed by the people as there is no sufficient care and security for them. The government and non-governmental organisations need to provide expert advice, walnut plantlets /seeds, and insecticides to farmers to grow more trees. It is only then that the problem will be solved once and for all. In the hope of huge returns, they will do whatever is possible to keep it safe and healthy,” Shah argues.

It can have great financial benefits for the poverty, militancy, and floods-stricken farmers. “Around 5 big walnut trees grow in one canal of land. Farming families usually own less cultivable but much more non-cultivable lands in Swat. If we take the average land per family at 50 canals and the family grows walnut trees on it, it can become millionaire within no time. Just leave the 300kg yield per tree, even if the per tree yield is just 50kg, it will earn the family around Rs2.5million at the current market rate.”

“Though main roads in the area have been repaired to some extent, the link roads to far flung areas are still inaccessible. It leaves the poor people with no choice but to sell their standing walnut trees to dealers on meagre prices, thus incurring losses,” according to him.

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Unaffordable Warmers

By Tahir Ali

Dry fruit –walnut, pistachio, chilghoza, peanuts and almond etc- and winter go hand in hand. While watching movies, reading books or newspapers or partying with friends, dry fruit are munched to warm the body.

Dry fruit are not only health-friendly but are also taken as gifts to friends and officials them in beautiful packets. But skyrocketing prices are making them an unaffordable luxury for the majority.

Dependent upon the taste, health, colour and size, the per kilogramme prices of different qualities of walnut are between Rs100-250 for whole and Rs400-700 for walnut flesh, of pistachio between Rs600-800, of almond Rs150-400 and chilghoza being the costliest of all with Rs1400 in Dir these days, according to Saeedur Rehman, a dry fruit dealer in Dir.

He said chilghoza (pine-nut) prices have surged to over Rs70,000 per 50kg (Rs1400) in the whole sale market and may be sold around Rs1500-1800 in the open market after the transportation charges, dealers’ commission, shopkeeper profit and imposition of various taxes taken into account,” said.

Contrary to general impression, he said militancy hadn’t adversely impacted the dry fruit production and businesses and opined that prices have come down as compared to last year.

“Prices of whole walnut were around Rs13-14000/50kg last year but this year these have come down to Rs11-12000. It is because there was bumper production this year. While we still have last year’s stock, the produce for this year has arrived in the market. There is no hope for the price-surge as the market is sluggish at the moment. The government needs to make arrangements for purchasing and exporting the commodity. I am sure the country would earn a lot of money and get good name in the global dry fruit market by exporting this quality commodity,” he said.

“The price of walnut, a Dir speciality, ranges between Rs5000-12000 per 50kg while that of its pure flesh ranges between Rs22000-35000/50kg. Walnut from Barawal and Bamboret are liked for their big size and taste. The brighter the fleshy part, the higher the price. And the cooler the area where it is produced, the better the taste and quality of the walnut,” he added.

“The sale of the walnut flesh fetches more income for the dealers. That is why people in Dir, rather than selling standing walnut trees or the whole fruit with cover, have started taking out its flesh and packing and selling it. A 50kg sac of whole walnut produces around 22-25kg pure fruit which fetches around Rs22000-35000 in the market, much higher than the whole fruit prices,” he said.

Malakand division accounts for 95 percent of provincial walnut yield. Walnut of different sizes, quality and colour are produced here which are marketed in whole form or only its flesh, taken out and packed, is sold in the market.

“Hundreds of tonnes of walnut, pine-nut and other dry fruit are produced in Dir and surrounding districts. Barawal, Dir Kohistan and Garam Chashma, Bamboret and Bony valleys in Chitral produce the best walnut and pine nut. The walnut from Nooristan Afghanistan also reaches the local market,” he said.

“But lack of official support, negligence of the concerned departments, continuous deforestation of the existing trees for getting ‘Dandansa’ and other purposes, non-cultivation of new ones and some ailments (stem-borer), ignorance of farmers and porcupine attacks have endangered this great asset,” he added

The government should provide technical advice/support, walnut plantlets and seeds to grow more walnut trees as these are depleting and about 90 per cent of the potential in the area is yet to be utilised.

Mr Rehman was particularly unhappy over cutting the walnut tree for getting “Dandansa”. “The problem is for Dandansa you have to cut down the younger trees whose stem-cover and roots are the best Dandansa. Even though it is unlawful to get and sell Dandansa, it continues unabated,” he said.

Shah Abdar, a Swat based grower of walnut, said hundreds of tons of walnuts are grown in Bahrain, Kalam and other valleys of Swat adding that the potential of walnut in the area is far from being utilized.

“Swat is the ideal place for walnut. It usually grows on mountain ridges, in the gorges and river-banks and thus doesn’t impact the already less cultivable land. Walnut could be the greatest source of income for the area people. But despite being the main asset along with fruit, vegetable and livestock, the number of walnut trees has been on the decline and only about 5 to 10 per cent of the area in Swat suitable for walnut is utilised thus far,” he said.

The forest department, he said each year runs tree plantation campaigns but there is no progress on the ground.

“The reason for this is absence of personal ownership. The trees so cultivated are often destroyed by the people as there is no sufficient care and security for them.  The government and non-governmental organisations need to provide expert advice, walnut plantlets/seeds, and insecticides to farmers to grow more trees. It is only then that the problem will be solved once and for all. In the hope of huge returns, they will do whatever possible to keep it safe and healthy,” he argued.

It can have great financial benefits for the poverty/militancy/floods-stricken farmers.

“There are around 5 big walnut tree is one canal of land. Farming families usually own less cultivable but much more non-cultivable lands in Swat. If we take the average land per family at 50 canals and the family grows walnut trees on it, it can become millionaire within no time. Just leave the 300kg yield per tree, even if the per tree yield is just 50kg, it will earn the family around Rs2.5million at the current market rate,” he opined.

“Though main roads in the area have been repaired to some extent, the link roads to far flung areas are still inaccessible. It leaves the poor people with no choice but to sell their standing walnut trees to dealers on meagre prices, thus incurring losses,” according to him.

Experts say walnut helps improve memory, is useful for treating stomach, liver and kidney diseases, for cardiovascular diseases and high blood pressure. It helps control cholesterol level, strengthens the walls of blood vessels and prevents diabetes and supports immune system.

huge banking spread halting growth

Interest
An unhealthy trend
unusual banking spread is one of the reasons of the stalled industrial and business growth in the country
By Tahir Ali

http://jang.com.pk/thenews/dec2011-weekly/nos-18-12-2011/pol1.htm#3

The huge banking/rate spread — the difference between the average rates of returns on deposits and the average rate of interest on loans — in the country may have helped increase the incomes of banks but it surely is one of the biggest reasons of the stalled industrial/business growth and below capacity production in industries that result in increased joblessness. It also leads to less saving, less investment and unjust income distribution.
Despite enhanced net income — after tax income of banks which was minus Rs2.8bn in 2000 rose to Rs54.5bn by 2009 — banks are reluctant to increase the rates of return on deposits as high rate spread is also one of the main tools of profitability for banks.
According to a bank manager at the national bank, who wished not to be named, the average deposit rate is 5 percent against 15 percent average rate of interest in the country.
While the average rate spread is around 3-5 percent in most countries, it is much higher in Pakistan. According to the SBP data, it was 4.63 per cent in June 2003 but increased to 8.90 percent in July, 2011, which means that the lending rate is greater by that extent from the rate of deposits.
If high rate-spread indicates lack of efficiency and competitiveness in the banking system on the one hand, it also signifies the failure of regulatory authority — the State bank of Pakistan.
The SBP, which is authorised under the SBP Act, the Banking Companies Ordinance and some other laws to make sure that banks do not exploit the depositors or the borrowers and earn profits through legitimate business practices, needs to review the existing rate spread and bring it down to a normal range.
Successive SBP governors, including Dr Muhammad Yaqoob and Shamshad Akhtar, while acknowledging that depositors were getting negative returns, had also urged large banks to increase the return on deposits or the State Bank would intervene to get results.
According to one estimate, interest rate in Pakistan is highest in the region. With business and industries already hit hard by terrorism and energy shortage, lending rates need to be brought down to a single digit to save them from bankruptcy, encourage private loans demand and spur economic growth in the country.
But if the banks reduce the rate of interest on loans but simultaneously cut down the deposit rates as well or increase both the rates of interests and rates of return on deposits by the same amount, the spread rate will practically remain high. So, any effort to slash the spread not only requires cutting down the lending rate but also increasing rates on deposits.
Despite inflation of around three percent, the United States decreased interest rates to almost zero percent and the European Union to just above one percent to push growth and create jobs.
High rate of interest, the main factor for huge rate spread on the back of small returns on deposits, is one of the main reasons for the rising loan defaults, below capacity working of industries, job cuts and surging non-performing loans calculated at Rs630bn in September 2011.
The high cost of funds is not only leading to industrial closures and defaults, the government, taking huge loans from commercial banks, is also drastically affected by the trend and is compelled to slash development funds, increasingly rely on borrowing and printing of new currency to meet its fiscal needs.
The difference in the interest rate being paid by the government for the domestic and external loans will illustrate the point. At the current rate of interest (14-15 percent), the government’s debt servicing costs stand at $10bn on domestic loans of$80bn. Conversely, it has to spend only around $2bn on external loans of $61bn given at an average rate of three per cent.
It is worth asking that when some local entrepreneurs in Mardan could offer as much as 50 percent net profit per annum through their investment schemes, why banks can’t increase the amount of profit on deposits for the depositors, the lifeline of the banking system in any society?
“One thought that privatisation of banks would entail better services at reduced cost for most of the customers, but it has, conversely, made banking costlier, exploitative and anti-poor,” argues a lecturer of economics, wishing anonymity.
“Commercial banks are earning huge sums of money due to high interest rate on the one hand and giving less profit on deposits on the other. Why would people go for depositing their money in banks when they could reap comparatively higher returns on their savings by spending them in real assets like investment in real estates, transport and other businesses?,” he asks.
While the banks have reduced rate of returns and increased lending rates to augment their financial gains, the poor consumers have been the real losers. High rate of inflation of over 15 percent per year for the last several years has aggravated the problem.
Depositors receive negative returns on savings when the rate of return on savings is less than the rate of inflation. For example, if consumers are given 5 percent of returns on their savings and inflation rate is 15 percent, savers will annually lose 10 percent of the purchasing power of their bank deposits.0
Commercial banks, both public and private, are believed to have deprived the depositors of around Rs1100 billion profit during the last 10 years by only avoiding the inflation rate formula of 2001 applied to fix the profit rate, says a report.
The absence of a genuine investment opportunities or ignorance thereof on part of the people notwithstanding, people have but to keep their savings in these less attractive bank accounts.
Quite a few people in the country, under the urge to avoid Riba (fixed return on savings) keep their savings in current accounts with no interests thereon. But banks are free to use their amounts any way they want and even earn money over these amounts by lending it to others.
According to a news report, bank deposits increased by 269 percent from 2001 to 2010, bank assets by 268 percent whereas growth in pre-tax profit has been 9,991 percent. He said banks earned Rs1.1 billion in 2001 which rose to Rs111bn in 2010 but the real average rate of return (minus rate of inflation) which was 3 per cent positive in 2001 came down to minus 6.5 percent in 2010.
Apparently, depositors are deprived of their due profit share because of the policy of writing off loans to the influential.
Banks, apparently, are more interested in interest profit than affording genuine and high rewarding investment chances to their consumers. And why would the banks increase the deposit rates and decrease interest on loans in the backdrop of excessive government borrowing which could help it overcome the low demand from the private sector.
“Loan defaults, frequent withdrawal by the deposit holders from their accounts, less fixed deposits, concessional loans, high rate of inflation and incessant devaluation of currency etc hinder banks from decreasing the spread,” says the manager.
Low-cost loans are opposed for reasons that they trigger inflation that’s why the SBP followed a tight monetary policy that kept the policy rate high. But the question is did this policy succeed? Could inflation be controlled and economy improved?

neglected orange orchards in manki sharif

Neglected orange orchards in Manki Sharif
By Tahir Ali

http://www.dawn.com/2011/12/19/neglected-orange-orchards-in-manki-sharif.htm

THE average per tree yield of orange orchards in Manki Sharif, a village situated 10km south of Nowshera, is falling owing to some diseases and water shortage, farmers say.
Around 31,000 tons of orange is produced in Khyber Pakhtunkhwa, but together with Palay, Manki Sharif is a brand name for excellent orange variety.
Scattered over vast areas in Manki Sharif and the surrounding villages of Maraji and Tangi, the area is home to about 80 orange orchards of different sizes. Oranges of these orchards are liked for their aroma, big size, appetising look and delicious taste and are transported to markets throughout the country and even exported.
With Manki Sharif included, district Nowshera accounts for around eight per cent of citrus fruit produced in the province. In 2007, around 3,200 tons of orange and lemon out of around 31,000 tons of provincial citrus yield was produced here.
Located at high altitude, these orchards get water from rains or bullock or power-run tube-wells. With good sunshine, the area could be suitable for solar energy-run water pumps.
Affluent and resourceful landlords have got their irrigation networks cemented. Around 30-40 per cent of irrigation water is still wasted because of uneven lands, substandard kacha water channels and culverts.
After the 2005 earthquake, farmers say, water has receded from some fields and the phenomenon has destroyed some orange farms.
Gul Rehman Khattak, a farmer in the area, said his orange orchard scattered over two acres was lost.
“After water in the oldest well at our land disappeared, we dug it two times — dozens of meters down but to no avail. The orange orchard is a thing of the past now and the dried trees have been cut for fuel,” he said.
Uzair Khan Khattak, another farmer, said water had receded from his land too.
“A couple of years ago, tube-wells would pump water at full speed without any break for up to nine hours but now the level goes down in less than five hours. The problem needs to be analysed and the government or NGOs should help in digging deeper tube-wells in the area,” he said.
“Depending on the size, quality, per tree fruit yield and market situation, an acre of orchard with around 150 orange trees may fetch Rs100,000-700,000. If density of fruit is high, a small orchard of 70 trees could earn a farmer up to Rs400,000.”
Yield per tree is highly erratic. “Last year, this tree produced up to 1,500 oranges but this year it will barely yield around 300 pieces,” said Khatak, pointing at a nearby tree.
“The per tree yield is erratic because orchards are affected by various diseases, especially the one called Ghawarake locally, which leaves a shining effect on the leaves and dries up flowers and fruit,” he said.
“Lands where there are only orange orchards without crop cultivation usually produce higher number of fruits and improve earnings. An orchard of an influential family in the area, for example, has been sold for Rs10 million this year. Farmers who have planted orange trees at proper place and distances and in rows and are taking good care of them, are giving better yield.
But those who have planted orange trees on banks of culverts and are utilising their lands for growing maize, sugarcane and wheat crops are earning more money,” he said.
The government should provide soft loans and subsidised power to orange growers and the NGOs should set up guidance/counselling centres in the villages and expose farmers to modern horticulture practices to improve yield.
The crop is bought by fruit dealers at flowering stage, when unripe or during harvesting season in January. If bought at flowering stage, the dealers have to face the risk of loss in case of damage to the orchards due to weather conditions. And in case farmers retain the crop in the hope of better returns, they have to face the repercussions of bad weather.
Cold storage in the area can help them save from losses as fruit could be harvested at an opportune time without waiting for buyers who usually purchase fruits on their own terms.
More orchards could be established by levelling uneven lands in the area through laser technology.
There is no problem in transporting the crop as the Manki-Nawhsera road has been constructed anew.
But ignorance and lack of access to soil testing, land levelling and modern drip irrigation technology, absence of good resistant seeds varieties as well as poor watering infrastructure and some diseases and water shortage are adding to the woes of orange growers in the area.

Delayed official tobacco price hindering its cultivation

Tobacco support price delayed
By Tahir Ali

http://www.dawn.com/2011/12/12/tobacco-support-price-delayed.html

The Pakistan Tobacco Board has advised growers not to cultivate the crop prior to entering into contract with a tobacco company of their choice to avoid problems in the sale of their produce.

However, farmers in Khyber Pakhtunkhwa are still awaiting announcement of official price of tobacco, which is keeping them away so far from going for the crop this year.

Tobacco companies are required to execute agreements on the purchase of flue-cured Virginia tobacco with growers by December 31 each year. However, this has not happened as yet.

“Notification of official price is necessary for finalizing tobacco contract between farmers and companies. Seedbeds are being prepared for the crop as of now which will be sown after two to three months. But who would go for growing tobacco when one is not sure of better returns for the crop,” says Haji Niamat Shah, senior vice-present of the Anjuman-i-Kashtkaran KP.

“As per MLO 487 farmers should be informed of official minimum price and weighted average price (WaP) before the end of October but it has been delayed,” said another farmer.

It was delayed because some areas had to be covered again after complaints that these were left out from consultations, says an official. “We have completed the interviews with farmers and are now assessing and analyzing the data to determine the cost of production and eventually the minimum price meant for tobacco over the purchase target of the companies and the Wap meant for tobacco within their purchase targets,” said the official.

Shah urged farmers to grow only the recommended hybrid varieties. “Last year we requested the companies to buy tobacco and promised that farmers would not grow the non-recommended varieties next year. Unless our farmers produce quality tobacco, we cannot get good returns locally or in the international market,” he added.

Companies usually provide hybrid seeds as per farmers’ requirements, but quite a few growers avoid doing so. A farmer said tobacco companies did not provide hybrid seeds free of cost and around Rs1,000 was charged for seed needed for one acre.

The official however defended tobacco companies. They did not take a single rupee from for hybrid seeds and supplied these free of cost to growers. “Growers may have to bear the cost of hybrid seeds when the seeds are in shortage and the stock with the companies are exhausted,” he added.

Last year, the minimum price was Rs104 and Wap Rs112 per kg. Tobacco companies gave up to Rs125 for both recommended and non-recommended varieties. But the growers now wanted better prices.

“Tobacco is an important cash crop which earned the country around Rs52 billion in taxes last year. The government and PTB should take into account the enormous increase in prices of farm inputs/services and cigarettes and fix rates at Rs200/kg. I think anything less than that will simply be unrealistic and unaffordable for farmers,” Shah said.

The PTB said the 23 tobacco companies would buy 72.95 million kg of Rustica, white patta and flue-cured Virginia tobacco( around 67mn kg) in the coming year.

“Tobacco companies earn billions each year. They need to reward the hands helping them earn such huge profits each year.

Increase in cost of inputs, rate of inflation, global tobacco trends and increases in prices of other agricultural commodities and raw materials warrant that tobacco prices should be sufficiently increased but tobacco farmers are denied fair prices,” growers complain.

The province accounts for 98 per cent of FCV production and grows the best Virginia tobacco in Charsadda, Mardan, Swabi, Mansehra, Buner, Swat and Dir.

The KP assembly last December had unanimously demanded that control of tobacco be handed over to the province and allowed to export its tobacco crop.

Per hectare yield of FCV in the province is around 2,600-2,700kg, while Punjab produces up to 3,419 kg per hectare of dark air-cured Virginia.

Discounted certified wheat seeds in KP

KP’s discount on certified wheat seed

By Tahir Ali

http://www.dawn.com/2011/12/05/kps-discount-on-certified-wheat-seed.html

“The discounted standard high-yielding seeds, approved by the provincial seeds council, will be supplied to farmers on first come first served basis. Growers have been advised to use these varieties to get better yields,” an official said. – File photo

The Khyber Pakhtunkhwa agriculture department has announced a discount in the prices of certified and basic wheat seeds for the benefit of the farming community.
Officials say the price of certified seeds has been reduced to Rs1,780 per 50kg from Rs1,850 and that of the basic variety to Rs1,900 from Rs1,950 last year.
“The discounted standard high-yielding seeds, approved by the provincial seeds council, will be supplied to farmers on first come first served basis. Growers have been advised to use these varieties to get better yields,” an official said.
“Wheat growers should use Pirsabaq-04, Hashim-08, Suren-10, Ata Habib-10, Sahar-2006, Uqab, Zam, KT-2000, Batoor, Fakhre Sarhad and Janbaz for irrigated lands and Pir sabaq-04 and 05, Hashim 08, Barsat-10 and Tatara for rain-fed areas in the province.
“Cultivation of substandard seeds —Shafaq, Bakhar, Abdus sattar, Bakhtawar-92, KT-2003 and Watan — which have the least or no resistance against reddish malaise, should be avoided,” he said.
“These seeds will be available in the model farm services centres and the offices of district agriculture officers. Any MFSC could get any amount of seeds it wants to buy from the official stock,” the official said.
But limited membership and inadequate revolving funds for buying inputs makes it impossible for the MFSCs to help most of its members.
Ahmad Saeed, chief planning officer, ministry of agriculture, says farmers can get seeds on one phone call.
“Farmers are advised not to buy substandard or fake seeds and report to district officers, field workers of the department or the Federal Seeds Certification and Registration Department (FSC&RD) about those dealing in fake seeds so that action could be taken against them under the Seeds Act.
“Under the act, those dealing in fake or substandard seeds are arrested, tried in a court and, if found guilty, are fined and jailed with their dealership cancelled.
“Any seed which does not have FSC&RD tag with information about its contents and uses, be it basic or certified, and is not sealed, is a fake seed. The agriculture department and the FSC&RD have already cracked down against substandard seeds and confiscated a large quantity of it from the market,” he added.
“The provincial requirement of wheat seed is around 80,000 tons. The government provides around 6,000-7,000 tons through official channels; the rest is supplied by private sector, while almost 70 per cent of farmers here use their own stocks.
“The farmers grow wheat on around 0.75 million hectares. Its acreage has not increased for lack of irrigation water due to insufficient infrastructure, irregular rains and delayed cane harvesting,” says Mr Saeed.
“The department needs to replace 10 per cent of common seeds with basic or certified seeds. It has currently surpassed that benchmark.
“The department has developed over 6,200 tons of basic and certified seeds and has supported the private sector to produce over 7,000 tons of standard seeds. We have brought down seed prices for the benefit of farmers. We also provide free seeds, fertiliser and other inputs to registered progressive growers for their demonstration plots,” he said.
“The flood- and militancy-hit farmers in the province are also provided free seeds and other inputs by the provincial disaster management authority and international donors. All these measures are expected to increase wheat acreage slightly, if not by a big margin,” he hoped.
When asked why do growers go for substandard or fake seeds, Abdur Rahim Khan, a farmer leader, says cultivators do so mainly for two reasons. “Most growers, mainly the poor, don’t have cash with them. So they buy seeds on deferred payment which is not the case with certified seeds sale,” he said.
Khan opined that opening of village or union council-based farm inputs depots would solve this problem. “But then it requires huge financial allocation to the agriculture sector. Currently, the department receives less than two per cent of the provincial development programme,” he lamented.
At present, more than 500 registered national and five multinational seed companies are allowed to market seeds.
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Original text of the article
Certified wheat seeds in KP
By Tahir Ali
The Khyber Pakhtunkhwa agriculture department has notified the recommended wheat seeds for this season and also announced special discount in the prices of certified and basic wheat seeds for the benefit of the farming community, officials say.
The price of certified seeds has been reduced to Rs1780 per 50kg from Rs1850 and that of the basic variety to Rs1900 from Rs1950 last year.
“The discounted standard high-yielding seeds, approved by the provincial seeds council, will be served to farmers on first come first serve basis. Farmers are requested to use these high yielding as per the directions of the department to get higher yields,” an official said.
“Wheat growers should use Pirsabaq-04, Hashim-08, Suren -10, Ata Habib-10, Sahar-2006, Uqab, Zam, KT-2000, Batoor, Fakhre Sarhad and Janbaz for the irrigated lands and Pir sabaq-04 and 05, Hashim 08, Barsat-10 and Tatara for rain-fed areas in the province,” he added.
Farmers should avoid cultivating substandard seeds -Shafaq, Bakhar, Abdus sattar, Bakhtawar-92, KT-2003 and Watan- which have the least or no resistance against the reddish malaise, he added.
The seeds will be available in the model farm services centres and the offices of district agriculture officers. “MFSCs are the best choice as here all the agriculture related departments serve the farmers under one roof. Any MFSC could get any amount of seeds it wants to buy from the official stock. I guarantee it,” said the official.
But limited membership and small revolving funds for buying inputs for the member farmers make it impossible for the MFSCs even to help most of its members, what to talk of those outside its ambit.
Ahmad Said, the chief planning officer of the KP ministry of agriculture, said they had given advertisements in the newspapers with complete guidance and phone numbers of the concerned officials, adding that farmers could get seeds with one phone call.
“We will try our best to ensure smooth availability of certified seeds to growers but for human frailties, there could be some problems. Farmers are requested to help stop the sale of substandard or fake seeds by dealers and to inform the district officers or any field worker of the department or the federal seeds certification and registration department (FSC&RD) so that necessary action could be taken against them under the seeds act,” he said.
As per the provincial seeds act, those dealing in fake or substandard seed are arrested and tried in a court of law and if found guilty, they are jailed, fined and their dealership is cancelled.
“Any seed which has no FSC&RD tag with necessary information about its contents and uses, be that basic or certified seed, and is not sealed is a fake seed and farmers should report its sale and presence to officials so that action is taken. The agriculture department and the FSC&RD has already started crackdowns and confiscated substandard seeds in the market,” he added.
The province needs about 80,000 tons of wheat seeds in all. The government usually provides around 6000-7000 seeds of it through official channels while the rest is covered by the private sector and around 70 per cent of the KP farmers usually use their own stock for the [purpose.
KP farmers grow wheat on around 0.75mn hectares. Its acreage has remained sluggish for lack of irrigation water due to insufficient infrastructure, irregular rains, usually delayed cane harvesting, wheat completion with tobacco crop and the rampant use of agriculture lands for residential and commercial projects.
Around 50 per cent of KP’s agriculture land is rain fed and prolonged drought in Khyber Pakhtunkhwa as in rest of the country has left this land in the southern and central districts of the province, that account for around 55 per cent of the land under wheat cultivation, without wheat.
And the expected closure of canals for desilting purposes next month coupled with prolonged load-shedding and high generator cost make water availability more uncertain, thus diminishing wheat prospects in the province as water is critical for germination of seeds, fertiliser intake and maturity and strength of crop. This also underscores the need for developing drought resistant seeds varieties.
The department is required to replace 10 per cent of common seeds with basic or certified seeds each year. And the department has surpassed that benchmark.
“The department has, for the first time in recent history, developed over 6200 tons of basic and certified seeds itself and has also supported the private sector to produce over 7000 standard seeds in the province. We have also brought down the price of the seeds for the benefit of the farmers. And to the registered progressive growers, we provide free seeds, fertilizer and other inputs for their demonstration plots. The floods and militancy hit farmers in the province are also provided free seeds and other inputs by the provincial disaster management authority and international donors. All these measures are expected to increase wheat acreage slightly, if not by a great margin,” he hoped.
Regarding a question as to whether farmers associations have been taken on board in the distribution of seeds, he said the provincial government consulted them on all the relevant issues. “In the MFSC all the decisions and purchases are made by farmers themselves as per their needs. Even seeds are approved with the consent of the famers.”
When plenty of standard seeds are available, why do farmers go for substandard or fake seeds? I asked Abdur Rahim Khan, a farmer leader. He said farmers do so mainly for two reasons. “Most, especially the poor, farmers don’t have cash with them. So they buy seeds on deferred payment which obviously is not the case with public certified seeds sale. Then, most farmers, out of money constraint or sheer laziness, avoid going to the agriculture offices or MFSC, even if located a few miles away, to get the seeds and instead buy the substandard seeds available near their homes,” he said.
Khan opined the opening of village or union council based inputs depots would solve the problem. “But then it requires huge financial allocation to the agriculture sector which at present has to fulfil all its financial requirements within a meagre amount –less than two percent of the provincial development programme of the province,” he lamented.
At present, more than 500 national and five multinational seed companies are registered and allowed to market crop seeds. The public sector seeds production capacity, however, needs to be increased if the government does intend to replace all the seeds with certified seeds in near future.
Seeds are of three varieties -pre-basic, basic and certified. Pre-basic is the best quality seeds produced in agricultural research farms. It is then provided to the agricultural extension for cultivation in its agricultural farms which produce basic seeds. These are then provided to progressive farmers for further cultivation. The crop is regularly monitored and the seeds certified by FSC&RD is procured from them and sold to common farmers in the province.

Differences over new cane price

Farmers reject new sugarcane price
November 28, 2011
By Tahir Ali November 28, 2011

The province grows about 1.3 million tonnes of cane and produces about 0.4 million tonnes of sugar. – File photo

While the cane growers in Khyber Pakhtunkhwa are happy over the bumper crop this year, they are not satisfied with the support price announced by the Sugar Control Board recently.

Support price of the crop has been increased by Rs25 to Rs150 per 40kg from Rs125 per 40kg last year. But farmers say it is insufficient as the cost of production and land rent have disproportionately gone up of late.

Provincial minister for agriculture Arbab Ayub Jan last week held a joint meeting of the representatives of the sugar industry and the cane growers but it failed to resolve the issue.

Abdur Rahim Khan, general secretary of the KP Chamber of Agriculture, who attended the meeting, says the millers opined that the meeting was not a competent forum to review the cane price fixed by the Sugar Control Board.

“The industry representatives said they could not increase cane prices as they had set up mills to earn profit and not to incur losses. We will soon chalk out our strategy and may even ask farmers not to take their cane to mills and rather make gur of it,” says Abdur Rahim.

Murad Ali Khan, a leader of the KP Kissan Board, says the millers, belonging predominantly to the ruling elite, have the clout to get decisions in their favour in any forum.

“The SCB determines the cane prices, but being composed of officials, millers and their handpicked farmer representatives, it usually fails to safeguard the interest of cane growers,” he complains.

Premier Sugar Mills in Mardan started crushing on November 16 and rest of the mills in KP followed the suit, but farmers say they were already late by a month while gur making had begun nearly 50 days ago.

“Had crushing been started on time, thousands of acres would have been brought under wheat cultivation by now at the right time,” he says.

“ After harvesting, cane fields need to be kept fallow for about three weeks for soil renewal. But the differences over price between millers and farmers have made that impossible. It would delay wheat sowing and cut average wheat yield by about 30 per cent,” says Muhammad Khalid, an agriculture expert.

“It is strange that millers offer low prices for the cane at the initial stages when it has more juice and can produce more sugar.
And later when the juice is reduced and sugar recovery is less, they increase prices, raising not only the cost of sugar production but also damaging wheat output prospects for the coming year,” he laments.

“The cost of production (CoP) given by farmers is never accepted. As an SCB member, I would prepare details of the CoP and would ask the board to accept it or reject it with arguments. We would even advise them to fix cane price on the CoP basis prepared by the public sector’s sugarcane research institutes. But the sugar industry representatives would simply smile away our demand,” says Murad. He says millers always deprive farmers of fair prices.

“Each year at the start of crushing season, sugar prices come down and millers either delay crushing or stop it intermittently to compel farmers to sell their crop at lower price, especially when there is a bumper crop as this year and when the increasing cold and frost makes quick harvesting necessary to save the crop,” he says.

Gur is sold at Rs11,000 per160kg. For 300 maunds of cane, a farmer can earn Rs83,000 if he makes gur from it and around Rs56,000 if he sells it to mills. Why would he opt for the latter in this backdrop?

“Support price for the crop is fixed at Rs150/40kg or Rs187 per 50kg and no factory can purchase cane from growers below this price. The actual market price of cane depends on sugar rates. If sugar increases, the actual price of cane goes up. Last year cane was sold at Rs337/50kg or Rs270 per 40kg against the support price of Rs125,” he says.

Masud Khan, cane manager at Premier Sugar Mills, is, however, hopeful that sugar prices will go up and with it the cane prices once the government starts buying sugar stock available with the mills and allows export of trading surplus.

Sugar mills face competition with gur producers who consume around one-third of the crop. The province grows about 1.3 million tonnes of cane and produces about 0.4 million tonnes of sugar. As the area under cane cannot be increased, there is a need to develop high-yielding cane varieties.

KP to directly procure wheat next year

Direct wheat procurement from growers
By Tahir Ali

Dawn, Nov 21, 2011

http://www.dawn.com/2011/11/21/direct-wheat-procurement-from-growers.html

The Khyber Pakhtunkhwa government has announced that it will directly purchase wheat from growers this year instead of buying the grain from other sources. And the provincial food department’s procurement drive will be financed by the Bank of Khyber.

The direct procurement is expected to save around Rs6,000 per ton and could help cut provincial government’s expenditure by Rs2.5 billion in the procurement target of 0.4 million tons.

While acknowledging the sharp rise in cost of production, the Agriculture Planning Institute (API) has recommended a wheat support price of Rs11.50 per 40kg for the coming season.

This recommendation has been forwarded to the federal cabinet for approval. But approval of provincial chief ministers would also be needed for the price raise as the ministry of food and agriculture stands devolved after the 18th Constitutional Amendment.

Whether the chief ministers would approve the proposal or not is yet to be learnt, because of its impact on urban consumers.

As the elections due in t one and a half years, the government may find itself in a fix to take an early decision. It wants to please the growers by increasing the wheat support price but also knows that the increase would fuel food inflation and may result in public backlash. This explains the delay in taking the decision on the issue.

The high prices of farm inputs have raised the cost of production. The API, keeping this fact in mind, has also stressed the government to withdraw taxes and duties on agricultural inputs.

Small growers have been complaining of negligence and malpractices in the procurement system. “Officials purchase of the commodity from middlemen but the growers have numerous complaints. The procurement centres discourage and compel growers to approach their agents,” a farmer complained.

“Because of delays in assessing the crop, that expose the produce to thieves and vagaries of weather (as it is mostly kept lying in the open at procurement centres), and frequent wrong assessment and rejection of their wheat quality/variety, farmers usually prefer to sell their produce to private buyers for quick deal at four to five per cent lower rates,” he said.

The middlemen, who usually work as cartel, often reduce demand that results in price crash.

In the past, Khyber Pukhtunkhwa has never been able to achieve its wheat procurement target owing to shortage of finances, wheat procurement centres, storage facilities and extensive role of the middlemen in the process. The procurement system needs to be revamped.

“The government should enter into pre-sowing wheat purchase deals with farmers. It should announce the list of wheat procurement centres and increase the number of such centres. Interests of small growers should be safeguarded during the procurement of the crop, especially of those from the floods/militancy hit areas,” says a farmer.

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 Original text of the article

New wheat support price and the new procurement system

By Tahir Ali

With the advent of the wheat-sowing season in the country, farmers are demanding an increase in the wheat support price but the question is should it be increased and if yes to what extent, or should the old support price remain unchanged in the coming year?

Farmers argue that cost of production has swelled in the wake of rising cost of agriculture inputs on account of growing energy prices, eradication of subsidies and imposition of general sales tax.

Though an suitable raise in official wheat price is their right, it needs to be remembered that any exorbitant increase, like the one in 2008, when the wheat price was raised from Rs625 to Rs950 per 40kg all at once, would make life miserable for the majority population, hit hard by floods and terrorism-hit slump on one side and the rising inflation and poverty on the other.

The agriculture planning institute (API), the former agriculture pricing commission, while acknowledging the sharp rise in the cost of production, has recommended a wheat support price of Rs1150 Per 40kg for the coming season.

This recommendation has been sent to the federal cabinet for approval. But approval of the provincial chief ministers would also be required for to raise the support price as the ministry of food and agriculture and federal committee on agriculture, which would initiate and complete the process, stand devolved after the 18th constitutional amendment.

The question is: Will the provincial governments give their consent to the suggestion, thereby directing the public wrath towards themselves and totally absolving the federal government of any blame? Whether the chief ministers would approve of the suggestion or reject it, it is yet not clear as yet.

Whatever decision the government wants will have to be taken soon as it will directly impact the wheat acreage and eventually the food security situation in the country in the coming year.

But with elections due in less than two years, the government finds itself in a fix: it wants to please farmers by raising the wheat support price but also knows that the raise would increase food inflation and public unrest, which could provide further fuel to the anti-government campaign. It explains the delay in taking a decision on the issue.

It is writing on the wall that the government would raise the price eventually as it can’t displease the powerful landlords- PPP’s traditional strength- who are to massively benefit from the move and because the poor have no organised and powerful lobby to thwart the attempt and safeguard their interests in the power corridors.

Constituency-based politics, experts argue, has forced the government not to take any decision that could annoy the feudal class where a majority of the government elite come from.

Higher wheat support price in general benefits the big farmers at the cost of higher food inflation, higher interest rate, lower investment in other sectors and lower growth, they argue.

Pakistan is the only country in the world to have subjected agriculture inputs to general sales tax, which increases cost of production, believed to have climbed by about 200 per cent in recent years, and brought commission agents and dealers under sales tax which eventually mean high prices for consumers. The API has also stressed the government to withdraw taxes and duties on agricultural inputs.

Annual average wheat production in the country is 24 million tons. It means farmers pocketed around Rs98 billion additionally each year during the last three years from wheat alone if even half that produce was sold by them. Khyber Pakhtunkhwa farmers grow one million ton wheat each year. By this analysis, the farmers here have earned around Rs10bn in this head annually.

Hundreds of billions of rupees have been transferred to the rural economy on account of hike in major crops during the last three years. This is a big amount and the state of life of millions of farmers should have improved but the opposite is the case.

Big landlords, constituting only 10-12 per cent of all farmers, might have benefited but smaller and poor farmers, forming over 85 per cent of the farmers, usually fail to take advantage from the raised price as they have no resources and contacts in the right quarters to carry and sell their outputs at the procurement centres.

Small farmers have been complaining of negligence and malpractices in the procurement system. “Officials purchase the commodity from middlemen but numerous defects are pointed out when small growers approach the procurement centres; they are discouraged and compelled to approach the agents,” a farmer complained.

“For delays in assessing the crop, which exposes the produce to thieves and vagaries of weather as it mostly lies in the open at the procurement centres, and frequent wrong assessment and rejection of their wheat output, farmers usually prefer to sell their produce to private buyers for easy and swift deal though on four to five per cent lower rates,” he said.

In the wake of lacklustre procurement campaign, the agriculture commission mafia that usually work as cartel reduce demand, resulting in price crash and the poor farmers either have to sell it at lower prices or consume it themselves.

Ironically the agriculture department has no role in the procurement of wheat and the work is performed by the food department in all provinces which obviously neither has neither direct connections nor sufficient information on the farmers.

The Khyber Pakhtunkhwa government has announced it would directly purchase wheat from growers this year rather than from other sources.

The Bank of Khyber has agreed to finance the procurement drive by the provincial food department for this year.

Lesser direct procurement exert great financial burden on provincial exchequer on purchase and transportation from other provinces.

Direct procurement saves around Rs 6000 per ton and could help save KP around Rs2.5bn if the procurement target of 0.4 million tons is reached and over Rs20bn if it procures all of its 3.5mn tons requirements from the open market.

In the past, KP has never been able to achieve its wheat procurement target for shortage of finances, wheat procurement centres and storage facilities and extensive role of the middlemen in the process.

The procurement system needs to be revamped.

 “The government should enter into pre-sowing wheat purchase contracts with farmers. It should announce the list of wheat procurement centres and increase the procurement centres. Interests of small growers should be safeguarded during the procurement, especially those from the floods/militancy hit areas,” he added.

Tapping the Solar Energy potential

Solar solution
Instead of investing heavily in the oil-run power plants, the government should explore the abundant solar energy potential for power generation
By Tahir Ali

http://jang.com.pk/thenews/nov2011-weekly/nos-20-11-2011/pol1.htm#1

Though Pakistan is beset with an acute energy crunch, it has failed to exploit the huge hydel power resources as well as the abundant solar energy potential for the power generation purposes for years.

The resourceful but unfortunate country receives high levels of solar radiation — approximately 1000 watts per square meter for most parts of the year. Global solar energy potential is estimated at 800 million megawatt while Pakistan has, according to an estimate, about 100,000MW solar energy potential, as it is the 6th luckiest country in the world where sunrays are available extending up to 16 hours in summer.

But Arif Allauddin, the chief executive officer of the Alternately Energy Development Board (AEDB), recently said that 2.9 million MW of electricity could be produced by utilising solar energy alone in the country.

The AEDB has signed several solar energy MoUs or contracts with different agencies for widespread use of off-grid solar technologies in Pakistan through public and private sector and for dissemination of solar energy and setting up local solar manufacturing facilities. But, the country is still far from exploiting the sun power for producing electricity that could run its factories and create millions of jobs in the country.

Instead of exploring the solar potential, the country has opted to invest heavily in the oil-run power plants, which has burdened the national exchequer with a huge oil import bill, exposed the people to exorbitant power tariff increases and still left the power producers with a circular debt of hundreds of billions of rupees during the last few years.

A project launched by the UN Environment Programme (UNEP) in 2003 in the Indian state of Karnataka, facilitated over 18,000 applications for loans for solar panels over three years. UNEP recruited two popular banks to take part in the project as part of their ‘priority sector lending’ obligation and it subsidised the loans to help decrease the interest rate. The project has been extended to other Indian states of Gujarat, Kerala and Maharashtra, and the UNEP plans to initiate similar projects in Algeria, China, Egypt, Ghana, Indonesia, Mexico, Morocco and Tunisia, but Pakistan is not included in the list.

While the World Bank and Asian Development Bank are allocating funds for solar technologies, the local banks do not come forward to support the sector. Non-seriousness of authorities can be judged from the fact that AEDB has yet to issue the new updated alternate energy policy. The present policy was drafted in December 2006. The draft of the new energy policy, which has been sent to the Council of Common Interest for approval, intends to help boost the growth of the domestic renewable industry by 2014. It, among other things, aims to facilitate establishment of a domestic alternate renewable energy manufacturing base in the country and promote research on the technology in the country.

Solar energy, one of the best alternate energy sources, lessens pollution, reduces global warming and does not harm the ecosystem. Besides, it is abundant in supply and it has no maintenance and operation expenses as solar cells and panels don’t require fuel (gas and oil etc) which are getting costlier by the day. It is also convenient in places not covered by traditional grids and village electrification through solar energy has already been on the agenda of the AEDB, but there are several problems.

Solar energy generation technology is deemed costly and unaffordable for one person, but is considered within the reach when combined investment is made by a few families or the process is supported by the government and international bodies. High cost of solar system, public unawareness and banks’ reluctance to lend to investors is further hurting potential projects and keeping the technologies from dissemination.

Failure to establish local solar energy manufacturing units in the country has also made it comparatively costlier. And several government companies — AEDB, Pakistan Council for Renewable Technologies, the AEC, etc — dealing with the sector and the lengthy process of approval of solar energy projects also inhibit investors.

The fact that solar energy system can be installed with one time investment and then there is no maintenance or operating expenses, those who can afford it are coming towards the technology in great numbers.

According to a report, the country’s first on-grid solar electricity system, 180 KW each, is being built at Pakistan Engineering Council and the Planning Commission with financial help from Japan. It will not only fulfil their requirements but the surplus electricity will be sold to the Islamabad Electric Supply Company.

President Asif Ali Zardari had recently asked the concerned bodies to shift Presidency to solar power on the pattern of Planning Commission and Pakistan Engineering Council. He had also ordered that one town be converted to solar energy each year, all new development schemes should have solar streetlights and solar cookers, heat pumps, water heaters and water pumps be encouraged.

According to a report in the Guardian recently, Greece plans to sell its sun to Germany which plans to develop about 20,000 hectares of solar power parks there for exporting renewable energy to Germany. And Greece, facing a default after it secured £97 billion in rescue funds, hopes solar energy can help it out of its debt crisis.

Germany is the global leader in solar energy, but it has a lot less sun than Greece. After Japan’s Fukushima nuclear disaster, the German government has decided to close its nuclear reactors by 2022.

Hit worst by the ever increasing loadshedding and power tariff, many people in Khyber-Pakhtunkhwa are turning towards solar energy and the sales of solar panels are going up enormously in the province, and particularly in the federally and provincially administered tribal areas, where there is less pollution and high intensity sunrays that can produce more energy.

“People are turning to solar technology as loadshedding, costliness of power and the rising maintenance and operation expenditures of generators have left them with no other option,” says Wakeel Ahmad, a Peshawar-based dealer of solar technology. “Solar lamps have been installed near Peshawar bus stand and these are likely to be installed on streets and roads in the city very soon.”

“Solar technology is sold in watts at Rs250 per watt with 20 years warranty. A normal household with daily consumption of 1000watt would thus have to spend Rs250,000. The family could also buy a solar panel only at Rs40,000 to charge its electricity based un-interrupted power supply systems to use the power later in their homes,” Ahmad adds.

Nazir Ahmad, a Swabi-based dealer, says hundreds of solar energy systems are sold in the area. A Wapda official in Dir, wishing not to be named, says people in difficult terrain of the district have installed even imported solar systems which has brought revolution in their lives and agriculture.

Over a million tube-wells in Pakistan are eating up billions in power subsidy and consuming an estimated 1000-1500MW of power, straining the weak national grid.

According to Nazir Ahmad, a solar tube-well with 20 years guarantee can be bought for Rs0.9 million which pumps water non-stop from sunrise to sunset for irrigation. Solar pumps could fulfil the daily water requirements of small to medium size fish farms and communities as well.

“The government must provide incentives such as tax holidays, grants to the selected villages, some resource risk coverage, competitive tariff for solar energy and guaranteed purchase agreements from producers,” says the dealer. .