The Pakistan Agricultural Storage and Services Corporation Limited (Passco) is unable to initiate working on the planned 34 grain storage facilities (steel silos) across the country as the Islamic Development Bank (IDB) has delayed funding of the project, Business Recorder has learnt.
In February this year, the IDB and Federal Ministry of Food and Agriculture had signed an agreement under which IDB agreed to provide $95 million to Passco for building of 34 grain storage facilities in Pakistan. According to sources, the Bank has subsequently shown reluctance to provide $95 million soft loan to Pakistan Agricultural Storage and Services Corporation Limited (Passco) for building the 34 grain storage facilities (steel silos). The reasons have not been specified.
As per plan, total cost of the project would have been $113 million; of which $18 million would have been provided by government of Pakistan, and the rest by the IDB. The construction of 1.01 million tons storage capacity in the shape of steel silos throughout the country would assist the government to preserve staple food items like wheat, rice and pulses for longer time than at present.
The project envisaged construction of 25 grain stores in Punjab, which is the biggest grain producer province, 3 in Sindh, and one each in Khyber Pakhtunkhwa, Balochistan, Gilgit-Baltistan and Azad Jummu and Kashmir. According to the plan, the project would have been completed in four phases over a period of four years: in the first phase 9 storage capacities would have been constructed from July 2011 to June 2012; in second phase, 9 complexes; and in the third and fourth phases, 8 complexes apiece were envisaged to be constructed till end of June 2015.
Pakistan annually produces about 24 million tons of wheat, 6-7 million tons of rice, 4 million tons of maize, 55-60 million tons of sugarcane and about 12 million bales of cotton. The storage facilities in the public as well as in the private sector are not sufficient, and result in damage to thousands of tons wheat and rice annually. Pakistan is facing grain storage problems on a large scale, due to traditional methods of seed storage and/or shortage of commercial grain storages and their management. Grain is often stored in godowns for protection against birds, rats and insects/pests, which causes damage to seeds from time to time.
Last year in August, due to lack of proper storage facilities, nearly 0.75 million tons of grain and seed were destroyed by devastating floods in Punjab and Sindh. The storage of wheat and rice and seeds of pulses and oilseed crops due to their high food value is important. There are seed hazards which occur due to poor storage facilities.
Wheat is the only grain crop that is produced with low-cost technology due to minimum use of pesticides except inputs such as seed, fertiliser and farm machinery etc Other crops like rice, cotton and sugarcane are cost effective and need proper care for handling and storage.
Hundreds of thousand of tons of wheat, other food and cash crops like rice, sugarcane, cotton, oilseeds and pulses have to be stored in temporary facilities that afford inadequate protection and increase pilferage but after the completion of this project, Pakistani farmers as well as the government would be able to better protect grains and other crops from damages.