Over three million tons of wheat stock available: rise in flour prices indicative of a food security crisis

The fresh increase in flour prices sowed fear a sizeable population may struggle to have the commodity easily, despite availability of ample wheat stocks, agriculture experts said on Monday. The situation caused great alarm for the agriculture country as inflation pushed away the prices of edible commodity from a large number of population, they said.
Experts said despite over 3 million tons of wheat stock in the country, flour price is touching the Rs 45 per kg mark in urban areas and this is indicating a food security crisis. They believed that presently Pakistan is going through a huge food security crisis as a large number of population may remain undernourished due to high food prices. "Food insecurity is assuming greater urgency and should now be seen as a long-term disaster, therefore there is need for modifying the government policies in order to support agriculture sector and its cost drivers," they added.
The ministry of food security reportedly not helping the farming community and it has a poor role in this developing situation, they said. They said that unavailability or shortage of fertiliser has also led to decrease in per acre yield and a recent study on Pakistan's agricultural sector revealed that Pakistan is set to face at least 1 percent decline in wheat crop yield per acre. They said that the study also indicated that the decline in wheat production in 2012 was primarily due to 14 percent YoY decline in urea and 34 percent YoY decline in DAP consumption by the crop and delay in wheat crop sowing.
Although, this year with an increase of 2.5 percent, some 23.9 million tons of wheat crop is expected followed by 4 percent increase in the area under cultivation, mainly due to rise in wheat support price, however the production will remain lower than a high of 25 million tons achieved in FY 2011, the study said.
"In order to increase the per acre yield and achieve a healthy wheat crop size in coming years, the government must introduce measures to bring down the input cost for farming community that ensure food security of the country," they suggested. The government has helped all the factors that contributed to steep rise in the food prices, instead of practical measures to keep the food prices under control, they said and added that due to government's poor policies farmers are paying heavily to ensure the food security in the country. On the other hand the government seems completely uninterested in resolving the problems of farmers, they added.
The prices of fertilizer, diesel, water, seeds and pesticides have witnessed massive increase during last few years. It resulted in high input cost and presently farmers are facing a dismal financial position followed by rising cost, they pointed out. Now, farmers need more funds for a crop. They have focused on generating more funds instead of production, they added.
Talking about increase in wheat support price, they said although the federal government has supported farmers by increasing the support price for important food crops but on the other hand the prices of most essential food items such as wheat flour is increasing and touching Rs 45 per kg level in urban areas. "This is an alarming situation which will result in more hunger in the country," they added.
Agricultural experts said the government tries to consolidate its rural vote bank by increasing wheat support prices every year and thinking that all farmers would benefit from higher support price, however, this is a wrong assumption. According to Pakistan Agriculture census, to be believed, around 85 percent farmers don't produce marketable surplus. Thus, they are not the beneficiaries of a regular increase in the support price of wheat. They said despite increase in wheat support price, farmers need a proper and long-term solution to tackle the rising cost of agricultural input.
"A large number of farmers produce wheat for own consumption and only sell the surplus commodity in the market to earn some money," they said. In addition, experts believed that current increase in the wheat support price will not completely deliver because of system's leakage. Farmers always get price less than support price due to involvement of middleman in the procurement process and they usually offer a price less than Rs 50-150 per maund as compared to announced support price, they added.
"According to a recent report of Merrill Lynch the only way, the government can reduce the input cost of fertiliser prices is through restoration of gas supply leading to cut in urea prices and provide direct price subsidy on phosphates." Reports further say that despite the fact that wheat support price is up 14 percent net realised gross income at the farm gate level will still be lower as small farmers hardly get access to government procurement agencies, black marketing of wheat sacks distributed by the government agencies to procure wheat, commission taken by middlemen from small farmers and rise in wheat prices resulting in higher cost of seeds.