Farmers have welcomed the decision of the Economic Co-ordination Committee (ECC) to allow Pakistan Agricultural Storage and Services Corporation (Passco) to export rice. It is an encouraging breakthrough for the rice farmers and they will be encouraged to increase rice production, said President Basmati Growers Association (BGA) Hamid Malhi in a statement, issued here on Friday.
President BGA said rice production reached a record of 6.9 million tons during 2008-09 and 5.5 million tons during 2007-08, while rice exports decreased from 3.3 million tons to 2.9 million tons during the same period. Surplus rice caused a glut in the domestic market in November/December 2009. The role played by Passco to purchase 4,35,832 tons of rice from the market in 2008-09 was a great relief for the domestic rice sector, he said.
Although the farmers could not fully benefit from Passco's intervention, but the intervention did decrease pressure on trade, which caters for purchasing of the total rice produce, he elaborated. However, he said Passco's performance during 2009-10 has been nominal and its rice purchases of Basmati have not exceeded 50,000 tons, which is not even 1 percent of the total rice production.
Malhi observed that in the event of export by Passco, which are to be on a government to government basis, it would not effect the existing export trade, especially when a 900$/ton Minimum Export Price (MEP) has been enforced on Passco, below which it would not be able to sell its stocks.
Perhaps it is feared by the rice exporters that the 900$/ton rate would uncover the under invoicing, which is rampant in the rice export sector. He said lobbying by the rice exporters last year was successful in stopping TCP from making further purchases from the domestic market and it only procured 25000 tons of Basmati rice and a small quantity of Irri 6 rice, he claimed.
The country could not afford decrease in rice production, which is the major foreign exchange earning commodity. Monopolistic behaviours and policies should be strongly done away with, he stressed. Hamid Malhi said rice exports would have remained independent of government's intervention had the rice exporters purchased or entered the market during the paddy-harvesting period.
But as always, they chose to remain on the sidelines and in comparison to the Rs 1250 announced by the government for Basmati paddy, the rates in the market hovered around Rs 800 per 40 kg. This is what forced the government to intervene through Passco & TCP to bailout the farmer. Farmers fully support all such actions of the government and demand that it should not succumb to the pressure tactics of the rice exporters, he concluded.
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