Fall in wheat sowing

It is sad to learn that wheat target of 2019-20 season in Pakistan has been missed by about 2.5 percent. According to the final estimates now available with Ministry of National Food Security and Research (MNFS&R), wheat during the current season was sown over an area of 8.839 million hectares against the set target of 9.062 million hectares which might affect wheat production target of 27.03 million tons fixed by the government. In Sindh, the second largest producer after Punjab, wheat was sown over an area of 1.115 million hectares against the target of 1.150 million hectares, in Khyber Pakhtunkhwa, over an area of 0.760 million hectares as against the target of 0.802 million hectares and in Balochistan, over an area of 0.417 million hectares as against the target of 0.550 million hectares. In Punjab, which produces 75 percent of the country's wheat, the crop, however, was sown over an area of 6.564 million hectares as against the target of 6.515 million hectares. The reasons of fall in wheat sowing in three provinces were, however, not the same. For instance, while Sindh missed the cultivation target due to late start of sugarcane crushing, Balochistan failed to meet the target due to climatic change, heavy rains and snowfall during the sowing season.

It is unfortunate that both the area and production of wheat have been declining during the recent years. For instance, output of wheat which stood at 26.7 million tons in FY17 declined to 24.3 million tons in FY19 while area under the crop also came down from 9.0 million hectares to 8.8 million hectares during this period. The sad aspect was that yield for hectare which is supposed to increase over the years due to better technology in production and improvement in seed quality also fell from 2,973 kilograms per hectare to 2,778 kilograms per hectare in the same period. The data show that since the area under wheat cultivation at 8.8 million hectares is the same in FY19 and FY20, a substantial rise in production during the current year is impossible unless there is a sharp improvement in the yield per hectare which does not seem likely to be the case. If this is true, the production target of wheat will also be missed by about 3 million tons and this will be a huge shortfall. The news is really disturbing when seen against the backdrop of recent wheat crisis in the country which witnessed the price of wheat skyrocketing to new levels. The plight of the poor and the common man could be gauged from the fact that while inflation is currently running at 14.5 percent on a yearly basis, food inflation is at an astonishing level of 24.0 percent which has made the lives of ordinary people very miserable and defamed the government for poor policy. In the likely event of a further decline or stagnation in production during the current year, these negative trends will not only be accentuated but the growth rate of the economy will be adversely affected since wheat accounts for 8.9 percent of value-added in agriculture and 1.6 percent of GDP. There are already apprehensions in the market that GDP will grow only by a dismal rate of little over 2 percent this year.

The government seems to be very much aware of the situation and has taken both short- and long-term measures to reduce the burden of higher prices of wheat on the common man. As a short-term measure, the Federal Cabinet has approved a Rs 10 billion subsidy at the rate of Rs 2 billion per month for the next five months to the Utility Stores Corporation (USC) for provision of edible items of daily use to people at affordable rates. The main item is wheat which is the major staple food item of majority of population, claiming a large part of their disposable income. Besides, the government is planning to squeeze the space for hoarders and profiteers and punish them if they do not behave properly. As a long-term measure, the Prime Minister's Agriculture Emergency Programme envisages "Productivity Enhancement of Wheat, Rice and Sugarcane." The cost of wheat project is Rs 19.3 billion spread over a period of 5 years and the key interventions include promotion of mechanization through a 50 percent subsidy, development of high yielding hybrid varieties, upgradation of modern research institutes and reorganisation of extension services at all levels. It may be mentioned here that a large part of subsidies never reaches the targeted sections of society and utility stores are mostly concentrated in middle level urban centres and not in rural areas where most of the poor and average households reside. Also, subsidies may be necessary at the moment but would be a burden on the budget and likely to be opposed by the IMF. Overall, however, the decline in wheat sowing this year suggests that the situation of wheat crop, stocks of the commodity, its consumption and the movement within the country must be continuously and closely watched in order to ensure that prices of wheat could be contained within reasonable limits all over the country throughout the year.