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Business Recorder
6 days ago
- Business
- Business Recorder
Govt fixes ex-mill price of sugar at Rs165/kg
The Ministry of National Food Security & Research announced on Monday the ex-mill price of sugar had been fixed at Rs165 per kilogramme (Kg) after successful negotiations between the government and the sugar industry. The government directed all provincial governments to ensure that sugar was sold in line with the new rate. 'All provincial governments should ensure the availability of cheap sugar to the public,' the ministry said. The development comes days after Pakistan's state agency, the Trading Corporation of Pakistan (TCP), issued an international tender to purchase and import 300,000 to 500,000 metric tons of white refined sugar. The deadline for submission of price offers is July 18. On July 8, Pakistan's government had approved plans to import 500,000 tons of sugar to help maintain price stability. Market analysts said that retail sugar prices in the country have risen sharply since January. The sugar is sought from worldwide origins, packed in bags with a minimum offer of 25,000 tons permitted. The TCP reserves the right to purchase more or less than the tender volumes, traders said. Shipment is sought in a series of consignments loading in August.
Business Recorder
10-07-2025
- Business
- Business Recorder
National food security demands farmers' security
Pakistan's agriculture is not just a food-producing sector — it is the economic backbone of rural Pakistan and the foundation of national food security. The collapse of wheat in FY25 is not a standalone event but a symptom of deep-rooted institutional decay, exacerbated by uncoordinated policymaking and a lack of accountability at both federal and provincial levels. If meaningful reforms are not undertaken now, no amount of relief will prevent the next agricultural collapse. What is needed is a long-term, climate-resilient and farmer-centric vision — one that views agriculture not as a fiscal burden, but as a strategic investment in Pakistan's future. Pakistan's agriculture sector, which employs more than a third of the country's population, stands at a perilous crossroads. Despite some concessions in the 2025–26 federal budget, the sector continues to suffer from deep-seated structural failures, most recently exposed by the wheat market collapse of the past fiscal year. The latest budget attempts to offer short-term relief through credit expansion and tax exemptions, but these measures fall short of addressing the systemic dysfunction that now threatens Pakistan's food security and rural economy. In the 2024–25 wheat season, Pakistan recorded an impressive harvest of 28.5 million tonnes from 8.9 million hectares. Yet this apparent success turned into one of the most financially ruinous crop cycles in recent history. The government, operating under IMF-imposed fiscal constraints, withdrew from wheat procurement and failed to announce a Minimum Support Price (MSP). Simultaneously, it either authorized or failed to prevent the import of 3.5 million tonnes of wheat worth US$1 billion — despite a domestic surplus. The result was a catastrophic price collapse, with rates falling from Rs 3,900–4,000 per maund to just Rs 2,200–2,400 — far below the estimated production cost of Rs 3,200. This ill-advised import policy, reportedly driven by officials within the Ministry of National Food Security & Research — including food security commission-(ers) — and supported by importers and flour millers, caused immense damage. Although an inquiry into the scandal began over a year ago, it has yet to yield results, even after two crop seasons and the retirement of the official leading the investigation. Worse still, under pressure from international lending agencies, the support price for wheat was not announced, and both federal and provincial procurement were halted. Farmers, lacking storage and holding capacity, were left with unsold stockpiles, mounting debt and no viable recourse. The cumulative financial damage to wheat growers has been conservatively estimated at Rs 2,200 billion. Allegedly, provincial governments worsened the crisis by imposing price ceilings and deploying law enforcement against farmers attempting to sell wheat above the prevailing so called official rates. In several districts of Punjab and Sindh, tensions rose as growers faced legal action simply for trying to recover their costs. Moreover, in some areas, including Kamalia, the home area of the finance minister, perishable vegetables such as okra and potato were fed to livestock because the cost of harvesting exceeded potential market returns. The combination of federal withdrawal and provincial heavy-handedness laid bare the lack of coordinated agricultural governance across the country. The 2025–26 federal budget provides a mix of palliative relief and contradictory policies. Agriculture, Food, Irrigation, Forestry and Fishing have a meager allocation of Rs. 33.47 billion. On the positive side, it retains GST exemptions on fertilizers and pesticides, raises the agricultural credit target to adequate level and introduces a Clean Financing Facility that will offer collateral-free loans of up to Rs 100,000 via digital wallets for smallholders. It also allocates Rs 155million under the Green Initiative, which focuses on climate-resilient agriculture, seed improvement, and desert/corporate farming. While these initiatives are welcome, they are insufficient, given the new burdens placed on farmers. Among the most harmful new measures are the imposition of a 10% GST on solar panels — a vital technology for irrigation through tubewells — and a Rs 2.5 per litre carbon levy on diesel with fortnightly increase in price, Rs 7.50 per litre first and then Rs 10.39 again, an increase a couple of days ago, which further increases input costs. Urea and DAP prices have risen by Rs 100/200 and Rs.250/300 per bag, respectively, and there has been no relief on import duties or local taxes for farm machinery. Tractor prices now range from Rs 2.6 million to over Rs 5 million — well beyond the reach of most growers. Meanwhile, budget allocations for the Small Farmers Package and Youth Agriculture Loans have been slashed, prompting strong condemnation from farmer organizations such as the Kisan Board Pakistan, which has termed the budget 'anti-farmer.' Agriculture is a devolved subject under Pakistan's constitution, giving provinces substantial responsibility for extension services, pricing policies and crop guidance. Yet across all four provinces, governance has been inconsistent and ineffective. Punjab responded too late to the wheat crisis, Sindh relied on enforcement-led price controls, KP offered limited support schemes, and Balochistan continued to struggle with chronic input shortages. Farmers lack access to timely crop selection advice, market intelligence and climate adaptation training. Extension departments are severely under-resourced and depend on decades old obsolete crops knowledge, while provincial research and education institutions remain outdated and disconnected from the realities on the ground. Despite the government's stated goal of achieving 4.5% agricultural growth in FY 25-26, the sector grew by only 0.56 percent — and that too mostly due to livestock. Major crops, including wheat, rice and cotton, recorded negative or stagnant growth. These trends are likely to continue unless bold interventions are introduced following out of box solutions. Yet only Rs 4.25 billion — a negligible amount — has been allocated for development in FY26. Now sugar is being imported to benefit the foreign farmers or stockholders. No move has been made to tax large landowners or introduce land reforms, further entrenching inequality. Continued neglect of mechanization, smart irrigation and domestic seed development has stunted any hope of meaningful productivity gains. What Pakistan urgently needs is not just financial relief but a comprehensive national strategy for agriculture — one that harmonizes federal and provincial policies, stabilizes crop pricing, and invests in infrastructure, technology (including AI), and robust market linkages. A coordinated policy framework could help build storage capacity, reintroduce a fair MSP system, and incentivize diversified cropping based on seasonal demand and export potential. Tax incentives for climate-smart farming, subsidies for efficient machinery, and digital crop advisories could transform the rural economy — if implemented with commitment and coherence. Agriculture is not a peripheral concern — it is Pakistan's frontline defense against food insecurity, rural poverty and climate stress. Treating it as a secondary budget item or a short-term political concession will only exacerbate the crises already underway. A long-term, farmer-centric, and climate-resilient agricultural policy is no longer optional — it is a national imperative. (The writer is former Adviser/Director General, Department of Plant Protection ([email protected])) Copyright Business Recorder, 2025
