It would appear strange but bounties of nature could sometimes have their own complications and side issues. The surplus wheat the country has in its stores this season reflects such an unusual situation. As the new harvesting season nears in both Sindh and Punjab, Pakistan has already five million tonnes in its stocks. Of the total wheat stocks, Punjab is holding 3.5 million tonnes and Pakistan Agriculture Storage and Services Corporation (Passco) about 1.6 million tonnes while Sindh is believed to possess stocks of around 0.5 million tonnes. According to market reports, the country is again set to harvest a wheat crop of 25 million tonnes this season due to favourable weather conditions and a higher procurement price to lure growers to produce more. In January, the federal government had set a wheat export target of 1.2 million tonnes by offering transport rebate. Punjab was allowed to export 0.8 million tonnes of this commodity with a transport rebate of dollar 55 per tonne while Sindh was asked to export 0.4 million tonnes with a rebate of dollar 45 per tonne. However, only 247 tonnes of wheat was exported during July-December 2015-16, fetching just $66,000. Exports had already dropped to 10,441 tonnes (dollar 3 million) in 2014-15 from 20,037 tonnes (dollar 7 million) a year earlier.
Wheat surpluses in the country and the failure of the government to dispose them of in a fruitful manner is a proof of the authorities' callousness and indifference to analyse the situation carefully and in time for the larger economic interest of the country. It is more than obvious that wheat could either be consumed locally or exported to fetch foreign exchange. So far as domestic consumption is concerned, since wheat is a basic necessity of life for most of the households in the country, its demand is almost inelastic since a reduction in price can hardly lead to higher consumption. As for exports, the government seems to have misread the situation entirely. While wheat prices in the world market remain under a great deal of pressure, India has taken over the Afghanistan market from Pakistan, causing a glut of wheat in the market. The government did not consider global trends while fixing the procurement price of Rs 1350 per 40 kg for wheat. Clearly, these rates are not feasible when the international wheat prices are in the range of Rs 2200 to Rs 2300 per 100 kg. Against this background, there is no way in sight to dispose of last year's stocks or current year's crop which will find its way into the market after the middle of March in Sindh followed by Punjab crop after 15th April, 2016. It needs to be noted that if the procurement price of wheat had not been fixed at such a high level, farmers could have utilised their lands for growing some other crops like pulses which were more rewarding. Besides, it needs to be mentioned that usually big landlords are the real beneficiaries of high procurement prices. Obviously, neither the small landowners nor ordinary consumers in the cities are going to benefit from the existing policy of the government. Apparently, the government is also faced with an issue which could only be resolved through higher subsidies, entailing a great deal of burden on the budget. We don't know about the policy approach of the government to this festering problem but the authorities need to think fast and in a more prudent fashion to overcome the odds and sods of a difficult situation. The issue is important because wheat is the leading food grain of the country, occupying the largest area under a single crop. Not only does wheat add value to agriculture, it also makes a significant contribution to country's Gross Domestic Product (GDP).
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