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.

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About Tahir Ali Khan
I am an academic, freelance columnist, writer and a social worker.

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