KP`s lacklustre wheat procurement

Khyber Pakhtunkhwa’s lacklustre wheat procurement drive

By Tahir Ali Khan

Dawn, 23-05-11

KP`s lacklustre wheat procurement.

FARMERS in Khyber Pakhtunkhwa are not satisfied with the lacklustre wheat procurement exercise and want it to be stepped up. The province has recorded around 10 to 15 per cent increase in wheat production this year.

According to Abdur Rahim Khan, general secretary Khyber Pakhtunkhwa Chamber of Agriculture, the list of wheat procurement centres and its procurement mechanism has not yet been announced. “The government should open procurement centres at tehsil and union council levels at the earliest,” he said.

He said the farmers would benefit only if the government purchased their produce directly from the growers rather than leaving them at the mercy of the middlemen.

Khan alleged that the food department purchases wheat mainly from the middlemen. “The officials purchase the commodity from the middlemen for minting money. When growers go to sell their produce to it, numerous defects are pointed out in their crop; they are discouraged and compelled to approach the agents and sell their output at rates lower than the procurement price of Rs950 per 40kg,” he added.

“Farmers have to take their grains to procurement centres at their own expense. They also have to wait for quite some time for an opportunity to get their crop assessed. After 2 pm the officials leave for their home and the farmers have to arrange a watchman to guard their produce against theft.

Their grain usually lies in the open unsafe from rains and pests. It is in this backdrop that the farmers often prefer to sell their produce to private buyers for easy and swift deal at rates four to five per cent lower than the procurement price,” he said.

“I fail to understand why officials do not purchase wheat from growers at their doorstep when they cannot provide speedy procurement services to them at the centres,” he argued.

Talking to this scribe, provincial agriculture minister Arbab Ayub Jan said his department was not involved in the drive and therefore he didn`t know much about the process. “But during my recent visit to DIK, I found the growers complaining a lot about the wheat procurement mechanism. I noted their complaints and have sent a note to the chief minister about this,” he said.

Ironically procurement drive is the work of the food department in all provinces, and the agriculture department has nothing to do with it directly.

According to Murad Ali Khan, president of the KP Kissan Board, there should be more procurement centres. “The mechanism for wheat procurement should be made easy. The agriculture department should enter into contracts with farmers as in the case of tobacco crop. Farmers` bodies should be involved in the process,” he said.

Haji Nimat Shah, another farmer leader, said that lack of transparency and accountability in procurement has certainly exposed the farmers to profiteers.

The province needs about Rs9.5 billion for its total wheat procurement target of 0.4 million tons. It usually faces financing problems. On May 5, the Bank of Khyber signed a memorandum of understanding with the provincial food department and agreed to provide Rs7.5 billion for wheat procurement for the current season as compared to Rs5 billion sanctioned last year.

The provincial government has never been able to achieve its wheat procurement target due to a small number of procurement centres, financing problems and extensive role of the middlemen in the wheat market.

“The shortage of public procurement centres and storage facilities hamper attempts to meet annual wheat procurement targets,” an official agreed.

In 2008-09, the provincial government had slashed the target from 0.3 million tons to 0.1million tons and had actually procured about 0.090 million tons.

The support price system does not benefit the poor farmers as they cannot carry their produce to sell at the procurement centres. They either sell their crop at prices lower than the support price or consume it themselves.

Khyber Pakhtunkhwa usually depends for over 3/4th of its annual wheat requirements (over three million tons) on Passco, the Punjab government or imports.

Insufficient production and lesser direct procurement exert huge financial burden on the provincial exchequer on purchase, transportation and subsidy of wheat.

The province usually has a yield of about one million tons a year.It needs about 2.5mn tons at an estimated cost of about Rs59 billion while the incidentals alone for cost around Rs16bn, reveal official documents.

Direct procurement can save around Rs6,000 per ton. This year the direct procurement will help save over Rs2 billion for the cash-strapped province. It had saved Rs540 million in 2008-09 by purchasing around 90,000 tons directly from farmers.

Inadequate storage capacity also hampers meeting the procurement target. The food department has a storage capacity of about 0.38mn tons. About 80 per cent of procured wheat will be stored in open godowns or in rented warehouses.

The government hires private godowns but not many is ready to let warehouse for meagre rent.

The standing committee on food of the KP assembly had last year asked the government to construct wheat storages in all the districts of the province, but. Apparently with no results.

The government must construct modern silos and build godowns to augment the existing storage capacity. With the construction of more godowns and modern silos, waste of grains will considerably come down and procurement will become easy.

The agriculture sector has not received the priority it deserves, despite the fact it accounts for over 20 per cent of provincial gross domestic product, accounts for 45 per cent of total labour force and about 80 per cent of Khyber Pakhtunkhwa population is dependent on it for its survival.

Foreign debt accumulation and its implications

The Debt Collection

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Foreign debt accumulation and its implications

By Tahir Ali Khan

The News 16-5-2100

With grave threats to the economy such as terrorism, deteriorating law and order situation and recent floods, the government has resorted to obtain foreign loans that amount to billions of dollars. In such difficult state of affairs, should the government consider to seek a debt waiver from the international community?

Pakistan’s external debt has doubled in the past four years and the government is currently spending more than four times as much per person on servicing external debt than on healthcare.

Latest loans from IMF ($7 billion), World Bank ($1 billion) and Asian Development Bank ($2 billion) will further increase the country’s present foreign debt of about $58 billion. Its external debt will go up to about $73 billion in 2015-16, as debts that were rescheduled after 9/11 in return for Pakistan’s support in war on terror are effective again. The ratio of debt servicing will also expand as a result. This may lead to an already debt-trapped country to face even more predicaments in a few years time. The country is currently paying on average over $3 billion on debt-servicing. It means payment of Rs710 million a day and Rs30 million every hour to lenders.

The government’s inability to adopt austerity measures and curtail its burgeoning expenditure has left it with no choice but to seek costlier foreign loans and thus overload the people with more taxes to repay these borrowed funds.

The reconstruction and rehabilitation of militancy and flood-battered areas require billions of dollars. In addition, the ruling leadership has limited finances to run the country’s affairs. If the government’s scarce financial resources are utilised on repaying loans, then what will be left for poverty alleviation and social sector development? These areas have clearly been neglected by successive governments in the past and even today things have barely changed for the better.

Though the UN made a historic appeal to the international community last year (after Pakistan was hit by ravaging floods) to wholeheartedly provide assistance funds to the country for the reconstruction process, promises of loans have so far failed to materialise. Last year international aid agencies, Oxfam and ONE International called upon international finance institutions (IFIs) and lending countries to cancel all of Pakistan’s external loans.

It is an ironic fact that France received more than fifteen times, Japan more than five times, South Korea four times, and China three times money in debt payment from Pakistan last year as compared to their respective flood donations, as calculated by Oxfam. Consuelo Lopez-Zuriaga, Oxfam’s Head of Humanitarian Campaigns had dubbed it madness and absurdity and urged that Pakistan’s debts were written off so that reconstruction was started in full swing. Pakistan, however, could not capitalise on the aforesaid case.

There was contradiction in the narratives of two federal ministers at the Pakistan Development Forum last year. While the Interior Minister Rehman Malik requested for waiver of Pakistan’s external debt, Finance Minister Dr. Abdul Hafeez Shaikh disowned the call made by Rehman Malik, saying that asking for a debt write-off was never an option before the government and that it was a grave issue with serious consequences. This could negatively affect the country’s sovereign credit rating and make it difficult for it to raise money from the capital market in future.

He argued that most of the foreign debts were obtained from multilateral agencies and Pakistan had made commitments to these institutions while seeking loans, therefore being a sovereign nation, Pakistan should/would fulfil its commitments.

The government has announced measures to restrict its internal borrowing to 10 per cent of the previous year’s revenue collection and provincial borrowings at an equivalent of six-week expenditure of the previous year, but nothing of this sort has been done on the front of foreign loans.

It seems that the economic managers of the country are more interested in creating money to repay foreign lenders than to take Pakistan out of its present quagmire. Out of the total loans received from the US, almost 85 per cent of the aid money goes back to Washington.

There are numerous laws and resolutions which support the notion of writing off debts. Article 25 of the International Law Commission stipulates that “in case of an actual threat or a prospective peril to a state’s essential interests, the state is excused for not performing an international obligation”. A number of democratically elected governments -Argentina, Burkina Faso, Peru, Mexico, Paraguay, and Ecuador for example- have had refused debt payments on the basis of this rule. Pakistan can also decline to pay back its loans under this principle.

Pakistan’s current debt-to-GDP ratio is around 62 per cent, exceeding the 60 per cent limit set under the Fiscal Responsibility and Debt Limitation Act. Pakistan is fast approaching the debt-to-GDP ratio of 80 per cent, which according to the World Bank is default stage.

According to a 1980 resolution by UN commission on international law, a state cannot be expected to close its schools, hospitals and universities, abandon public services to the point of chaos, simply to have money to repay its foreign debts.

IMF had cancelled all its debt ($268 million) to Haiti, after a catastrophic earthquake hit it earlier this year. The cancellation was given through a newly established Post-Catastrophe Debt Relief Trust Fund, set up for this purpose. Pakistan, hit by a similar calamity, could have also resorted to the same measure.

Beginning in 1996, developed countries, under the Heavily Indebted Poor Countries and Multilateral Debt Relief Initiative, cancelled debts amounting to $110 billion and $93 billion, which belonged to African countries. The facilitated countries agreed to channel their debt savings to poverty reduction.

The success story of these nations can be replicated in Pakistan where expenditure on health and education combined stands at less than 2 per cent of the GDP. The foreign debts incurred by various regimes did not benefit the people of Pakistan. Therefore, Pakistan should appeal to the international community and the IFIs to cancel these loans, as they did in the case of Haiti.

In long term perspective, foreign loans become a source of poverty, backwardness and economic subjugation. New loans are taken to repay old ones and most debtors in turn have to spend more on debt servicing than they do on health and education combined.

If the rupee is devalued or dollar gets stronger, the rupee cost of the foreign debt goes up. At the moment, the government is buying dollars at almost Rs85 to service foreign loans obtained at Rs9.90 for a dollar or a little more in the 1970s and 1980s.

Foreign loans should be taken only for development projects in the country. A debt audit commission should be established to make an inquiry into all the foreign loans attained thus far and how these funds have been utilised. On a final note, the government needs to restart a national self reliance scheme for self-sufficiency and to get rid of the debt burden.

Floods and wheat in Khyber Pakhtunkhwa


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Floods and wheat in Khyber Pakhtunkhwa

By Tahir Ali Khan

Dawn May 16, 2011

THE floods may have caused colossal damages to Khyber Pakhtunkhwa’s economy but they have brought some good tidings for the post-floods wheat crop.

Despite repeated claims of losses to agriculture due to land erosion, the province is set to get a bumper wheat crop this year, especially in Nowshera, Charsadda and Dera Ismail Khan — the areas worst hit by last year’s floods.

Officials say rains at the right time, silt brought by the floods and provision of seeds by the public sector, non-governmental organisations (NGOs) and the Food and Agriculture Organisation (FAO) have helped produce a bumper wheat crop.

“Rains at good time have a pleasant effect on the crop. Again the silt layer brought to the fields by floods has also enriched and energised the soil. In our biggest wheat producing area, DIK, floods increased moisture contents in the non-irrigated fields. All these factors have enhanced wheat yield though its acreage has been comparatively less than the preceding year,” said a senior official.

Muhammad Tasleem, director general, Agriculture Extension, Khyber Pakhtunkhwa, said it was true that floods had eroded plenty of cultivable land and destroyed agriculture infrastructure. It had also made thousands of acres uncultivable across the province by bringing sand and pebbles to the fields besides raising its level beyond irrigation capacity. But at the same time floods had also benefited the soil,” he added.

According to him, though there had been losses to both public and private seed stocks in floods, its impact was not much as the department distributed around 5,000 tons of quality seeds which had been obtained from registered growers or purchased from Punjab Seeds Corporation.

The province had a wheat sowing target of 0.758 million hectares but the actual cultivation of wheat was on 0.740mh this year, he said. “This fall in acreage of staple food crop was because of land erosion and huge silting of fields mostly in the biggest wheat-growing areas of Peshawar, Charsadda, Nowshera and DIK. There was no rain at the time of sowing in rain-fed areas that decreased the acreage by about 5 – 6 per cent. But we are hopeful that production would be more this year than last year.

“Though wheat acreage has come down, the increase in per acre yield this year will offset the deficiency. There are reports of bumper crop with bigger grain from all areas especially the ones that had been worst hit by floods. The average per hectare yield of 1,519kg in 2009-10 has gone up to 1,575kg this year. And while we had 1.11million metric tons wheat output that year, we are hoping to get 1.14 million tons this year,” he added.

“Both per hectare yield and total production could have been even bigger had the farmers used sufficient quantity of DAP and urea in their fields. The commodity is simply getting unaffordable for the poor farmers as it is being sold at Rs4,200 per bag these days against Rs2,500-3,000 last year.

To ensure provision of quality wheat seeds to growers, the provincial government intends to purchase 5,000 tons of wheat
from registered progressive growers. The province needs around 8,000 tons in all. The rest would be provided by the private sector and the farmers themselves.

Tough there had been a lot of complaints against the NGOs and foreign donors for wrong distribution which were mostly given to non-farmers and thus were either consumed as food or sold in the market, Sherzada, chief planning officer of the ministry of agriculture, said they had not done a bad job.

“The FAO had spent around $54 million on buying and distributing fine quality wheat seeds among growers, he added.

But growers say they will benefit from the bumper crop only if the government procures wheat in time.

Abdur Rahim Khan, general secretary of the Khyber Pakhtunkhwa’s Chamber of Agriculture, said the government was yet to announce establishment of wheat purchase centres and its procurement mechanism. “The farmers will benefit only if the government purchased their produce directly from the growers rather than leaving them at the mercy of the middlemen,” he

Improving farmers and government nexus

Improving farmer-govt nexus

By Tahir Ali Khan

THE next year`s Khyber Pakhtunkhwa budget will mount efforts to facilitate farmers hit by floods and militancy to revive and develop the agricultural economy.

An official in the provincial government said the development activities would focus on addressing issues like the low per acre yield, small landholdings, outdated farming, non-availability of inputs and poor coordination between stakeholders etc.

Reviving the farming sector that has been severely hit by years of militancy and last year`s floods require short, medium and long-term strategies and funding, he added.

“We are suggesting a project worth Rs485m to compensate the farmers affected by the floods. While Rs1-billion Swat Development Package is also on the cards to compensate militancy-inflicted losses,” the official said.

Coping with falling acreage under cultivation, revitalisation of the Agriculture Engineering Directorate is being undertaken to prepare more land for tilling. A scheme for buying 40 bulldozers at a cost of Rs600 million has also been proposed.

“If the scheme is made part of the annual development programme and implemented, it will help level over 10,000 hectares. We are also intending to introduce laser technology for land-levelling in some areas,” he added.

“We want to implement a public-private partnership to develop high-yielding maize seeds at the Cereal Crops Research Institute (CCRI) in Nowshera.

Projects have also been proposed to rehabilitate the CCRI and Agriculture Research Institute, Tarnab, damaged by last year`s floods. We also plan to increase production of pre-basic and basic seeds in the province.”

“The government plans to develop integrated pest/crop management and soil conservation programmes, but rarely any ADP is fully implemented. The sooner these maladies are addressed the better,” he added.

For example, farm services were developed in 2007-08 under the 2005 agriculture policy, but these are now neglected and dormant in most districts. And rather than following a proactive approach to interact with the growers and livestock owners, the agriculture and its attached departments are waiting for them to come to get their problems resolved.

One wonders why this can`t be the other way round i.e. the department contacts farmers at their doorsteps.

While the public sector provides quite a few important services like soil and seeds testing laboratories, though on a limited scale, most farmers don`t even know about them, what to talk of utilising them for their advantage.

About 80 per cent farmers have no access to quality seeds and modern agriculture technology. There are around 13 research stations in Khyber Pakhtunkhwa which have developed several high-yielding seed varieties for various crops but their timely and easy availability has always been a problem. Farmers usually use substandard seeds that result in low yield.

“There is still a vast room for better coordination among farmers, seed companies and research centres,” the official said.

“There is a need to set up coordination forums to ensure better and speedy communication, feedback and cooperation between growers, private sector and the public sector. These centres should provide farm inputs and financial, technical and educational support to growers in their respective areas.

“The government can learn from local and foreign NGOs, especially the Sarhad Rural Support Programme, which have ensured liaison and participation of locals by developing participatory organisations at mohallah, village and union council and other levels.

These centres will comprise all stakeholders in agriculture and have store for farm inputs, repair workshop, veterinary hospital, soil testing labs, a branch of agriculture development bank, a multimedia workshop and an insurance company office for crop insurance.

Once these coordinating bodies are developed and subsequent regular interaction is maintained, most of the problems faced by farmers and the agriculture sector would be solved.

The directorate general of extension in the agriculture department needs to proactively disseminate agriculture technology and services to farmers.

The issue of public-private partnership has been focused in the provincial agriculture and horticulture policies but has remained unaddressed in practical terms.

“As chemical fertiliser is getting costlier, the government plans to create awareness about organic fertiliser. “We have launched a project for organic farming on trial basis at the Agriculture Research Institute at Tarnab and another project worth Rs12m has been proposed for the ADP this year,” the official added.

“Lack of coordination between the government and NGOs has also harmed the farmers. The government and NGOs are supporting farmers hit by floods and militancy but for faulty allotment/distribution, the aid is going to undeserving people keeping the needy deprived. The agriculture and revenue department and the MFSC should be taken on board in the apportionment and supply process.

Fake, adulterated and under weight seeds and fertiliser are making things difficult for farmers. Farmers` income could be substantially increased if quality seeds, fertilisers, machinery, pesticides and other services were given to farmers in time and on cheaper rates.


Growing mushroom in tobacco barns

Author: Jose A. Fadul. I took this picture of ...

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Growing mushroom in tobacco barns

By Tahir Ali Khan

Dawn May 2, 2011

MUSHROOM can be cultivated anywhere in Khyber Pakhtunkhwa but it is more convenient to sow it in areas where tobacco is grown.

Thousands of tobacco barns lie mostly unused from October to June every year which can be used for cultivation of mushroom.

The timing for the use of tobacco barns is ideal for two reasons: first, they are vacant and can be used without any damage to the next crop. Second, the crop requires temperature between 22-27 degrees Celsius and humidity of around 80 per cent, which prevail during that period.

The Pakistan Tobacco Board (PTB) has also started a project for cul- tivation of mushroom which will be promoted among farmers from next year.

“Farmers in Khyber Pakhtunkhwa have lagged far behind their counterparts in Punjab. The latter are earning more money from their modernised and efficient farming practices and for utilising their agriculture infrastructure to the maximum. For example tobacco farmers in Punjab grow cucumber and green chillies in winter and earn a lot of money. Unfortunately, Khyber Pakhtunkhwa farmers are either too ignorant or poor and not interested in doing that. They can earn a lot by opting to mushroom cultivation in their barns during the interval,” said a PTB official.

“We will provide technical support, guidance and spawn initially for growing mushroom to tap the potential and enable tobacco growers to increase their income,” he said.

“The PTB will provide seed to the farmers for the first time and then they will be asked to develop the spawns themselves for their use. Farmers will also be provided training and guidance on how to grow the plant, ” he added.

Farmers are generally ignorant about mushroom seeds and know-how to grow oyster or button variety. Guidance on the crop and provision of its spawns (seeds) to farmers could attract multitude of farmers to the sector.

The ingredients needed for the crop are easier to get. Mushroom spawn, two kg quality substrate (wheat straw) and two per cent lime, a plastic bag and clean water are all that is needed for growing mushroom.

Mushroom requires little space, consumes little time, does not need hard work and can be grown even by women and children.

It requires small investment. Its seed in a bag costs around Rs30 which grows in three months. An ordinary barn can provide around 30-50 bags, and with this investment a farmer can earn Rs1000-Rs1500 per bag.

Mushrooms have both nutritional and medicinal values. Being a good food for patients of heart disease, blood pressure and eyesight, mushroom can be used as a diet for common man and in soup.

It can also be marketed to save foreign exchange spent on import of canned mushroom.

Mushroom has been found to have greatly augmented milking capacity of livestock in the province. Its residues are also a major organic fertiliser.

The fungus apart from being a major organic food, is a rich source of protein and can be used as a substitute for protein-providing foods such as meat which is increasingly becoming costlier and unaffordable for the middle-class.

While growing mushrooms, sufficient amount of water, oxygen and darkness is needed. Sterilisation of the compost before spawning is another prerequisite which prevents it from poisoning.

The spawning process completes within 40-45 days. After a week, production starts which continues for three months. In case of button variety, the compost is ready within a month while the oyster`s compost takes a week for germination. This spawning component can also be used as seeds and a spawn bag gives 25 bags of mushroom seeds.

Marketing of the commodity is another problem. The farmers have no access to and information about the buyers. There are many buyers in the market but irregularity in supplies spoils things. Recently a five-star hotel showed interest in mushroom purchase agreement but it wanted regular supplies and good quality.

This can be sorted out by ensuring coordination between growers and purchasers on the one hand and the farmers on the other.

“By developing mushrooms farmers` and buyers` database, the problem of marketing the produce can be solved to the advantage of the stakeholders. We are hopeful that big chain restaurants will themselves contact the producers for the commodity,” the official said.

“Purchase centres can be opened in the districts where information can be provided to the stakeholders on the demand and supply situation of the commodity in the market to facilitate business,” the official added.

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