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Express Tribune
2 days ago
- Business
- Express Tribune
Wheat in Pakistan — quo vadis?
Daud Khan is a consultant and advisor for various Governments and international agencies. He has degrees in Economics from the LSE and Oxford – where he was a Rhodes Scholar; and Sanakhawan Hussain is a senior member of the Sindh Chamber of Agriculture. He holds a degree in economics and finance Listen to article For years Pakistan's sclerotic wheat sector has been on life support which has cost the taxpayers and consumers billions of rupees. Wheat is the basic staple food for most Pakistanis and makes up the bulk of our calorie intake. However, production has grown slowly, lagged behind population growth and made Pakistan increasingly dependent on foreign supplies. Between 2 and 3 million tons – around 10% of our needs – were imported in 2023-24 and it is likely that similar, if not larger, imports will be needed this year. The main reason for this slow growth is lagging farm level productivity – yields have remained stubbornly low at around 30 maunds per acre (3 tons/ha) over the last decade. The reasons for slow productivity growth are well known. Wheat is mostly produced by small farmers on tiny plots of land, often measuring less than 10 acres. These farmers lack technical knowledge and skills, as well as access to finance. They have failed to adopt even simple technology interventions such as reduced tillage, planting with certified seeds, use of seed drills, balanced fertiliser and micronutrient applications, and careful use of water. There are also large on-farm and off-farm losses due to poor harvesting and lack of bulk handling and storage in modern silos. Instead of working to improve yields through land consolidation, better farm management and improved technology, the government has in the past tried to accelerate growth by literally throwing money at it. Billions of scarce public money have been spent on subsidising costs of inputs and buying wheat at fixed prices that are often above the free market equilibrium price. The logic that underpinned this policy is that lower fertiliser prices would increase applications and raise yields; and high wheat prices would increase the amount of land allocated to wheat while also enhancing investment in inputs such as seeds, machinery and water. However, the policy has demonstrably not worked. The reasons for this failure are not difficult to understand. Fertiliser subsidies go mainly to medium and large-scale farmers who are already using close to optimal levels of fertilisers. Subsidies mean more money in their pockets but bring about little change in behaviour. In contrast, poor farmers, most of whom use sub-optimal doses of fertiliser, are usually not able to access subsidies. Similarly, poor farmers rarely benefit from high government procurement prices – the bulk of their production is for self-consumption and the surplus, if any, is usually sold at harvest time to intermediaries at whatever price they get. With growing fiscal constraints and pressure from various domestic stakeholders as well as development partners, the government has finally stopped wheat procurement at fixed prices. The abolition of government procurement was a shock to the system. In 2024, wheat prices fell to half their level in 2023. Wheat farmers were up in arms saying that the lack of government procurement and the collapse in prices meant that, for the first time in decades, they are unable even to cover operating costs. The solution is not to go back to a procurement system that has failed, but to move forward to create an efficient and competitive wheat sector. Like any major structural change it will not be easy. Some short-term measures to ease adjustment are already under implementation by the government and the private sector. These aim to improve the working of markets; provide a safety net to the poorest farmers; and enhance financial flows into the systems. Some of these measures are already having an impact. Wheat prices for the current 2025 season were initially similar to those for 2024. However, market intermediaries have realised that with output projected to be significantly lower than 2024, prices will increase. Already there are reports of large offtakes by traders and increasing prices. However, for the medium to long term it is essential to understand that farmers cannot make money if they continue to cultivate tiny plots, use inputs inefficiently and get yields of only 30 maunds per acre. The brutal fact is that cereal crops, such as wheat, can only be efficiently grown on large farms that use modern technology, appropriate machinery and quality inputs. Ideally this could be done if small farmers come together to work in cooperative or consortia; if larger farmers rent land from friends and relatives; or if corporates are allowed to buy or lease land. More dynamism is also essential to meet the challenges of climate change and in particular of changing rainfall patterns. This has resulted in higher precipitation in some of the arid areas in Balochistan and Sindh, and has expanded the potential area for wheat. But, making better use of this potential requires agile production systems. In good rainfall years, manpower, equipment and inputs need to be quickly moved into arid areas to plant wheat. In addition, small but carefully designed investments are needed, for example, in small dams for storage and water spreading; machinery pools that can be moved quickly as needed; and low-cost storage facilities for harvested grains. All this does not mean that small farmers should not grow wheat for their own use or for their friends and family. They should. And government research and extension systems must help them do this more efficiently. But at the same time, they should be helped to diversify into high value products where they can actually make money. Furthermore, there is need for a more liberal approach to both domestic and international trade in wheat related inputs, particularly seeds; allocation of more funding to research, including in collaboration with the private sector and international institutions; and creation of conditions for the private sector to utilise new lands in previously uncultivated areas The government should also liberalise wheat movements across the country, as well as allow the private sector to freely import and export. These steps are essential to create a national market that can balance out national and local supply shocks – shocks that are likely to increase in frequency and intensity in coming years.
Business Recorder
3 days ago
- Business
- Business Recorder
Sindh farmers ask FBR to reduce duty on tractors
ISLAMABAD: Small farmers from Sindh have approached Federal Board of Revenue (FBR) to reduce custom duty on imported tractors from 15 percent to 5 percent under massive tariff rationalisation plan to be implemented in budget (2025-26) to support agriculture sector. Farmers have also proposed FBR Chairman Rashid Mahmood to reduce the existing sales tax rate on locally manufactured and imported tractors from 14 percent to 5 percent, enabling the farmers to purchase tractors. This is not an exemption, but only a reduced rate already applicable of many items including vehicles under Sales Tax Act. The budget proposals of the Sindh Chamber of Agriculture (SCA) Hyderabad to FBR Chairman included rationalisation of tax structure and abolishment of levy of sales tax on tractors to support agriculture sector. Sales tax on tractors, pesticides likely When contacted, sources in the FBR revealed that the proposals are under consideration of the FBR during ongoing budget preparation exercise to facilitate poor farmers of the country. The chamber stated that the approved tariff plan to be implemented in budget (2025-26) covers elimination of Additional Customs Duty (ACD); phasing out of Regulatory Duty (RD); gradual elimination of the Fifth Schedule of the Customs Act and restructuring of the customs tariff. This must cover most essential item i.e. tractor which is not a luxury item like vehicle. Nabi Bux Sathio, Senior Vice President, Sindh Chamber of Agriculture Hyderabad stated: 'We, as representatives of the farming and agricultural community in Sindh, feel compelled to shed light on the significant challenges and hardships faced by our fellow farmers and agriculturists in recent times'. The chamber stated that the agricultural sector plays a pivotal role in Pakistan's economy, contributing 24% to the GDP and employing 37.4% of the workforce. However, the sector is currently grappling with a myriad of complex issues. These include the lack of investment and support, the adverse effects of climate change, and the dwindling availability of water, exacerbating the challenges faced by farmers and agriculturists. Moreover, farmers have been severely impacted by the inability to secure fair prices for their produce. The government's announcement of support prices for wheat and cotton has not translated into actual purchases at the stipulated rates, leaving farmers with no choice but to sell their crops at significantly lower prices. The situation is further compounded by the low prices offered for rice and the potential delay in the sugar cane crushing season, which has added to the woes of the farming community. He urged the FBR to reduce the existing sales tax rate on locally manufactured and imported tractors from 14% to 5% enabling the farmers to purchase tractors, and also reduce the custom duty on imported tractors from 15% to 5% and also for re-conditional tractors. Copyright Business Recorder, 2025
Business Recorder
05-05-2025
- Business
- Business Recorder
SCA concerned over prevailing water shortage
HYDERABAD: The Sindh Chamber of Agriculture (SCA) has expressed grave concern over the prevailing water shortage, mismanagement, and poor performance of the irrigation department. During a high-level meeting at the Chamber's headquarters in Hyderabad, chaired by Chief Patron Dr Syed Nadeem Qamar, several key demands were made to the government. The chamber called on the government to set the minimum support price for cotton at Rs. 12,000 per 40 kg this year. They also urged the Sindh government to introduce subsidies for wheat growers, tractors, and agricultural inputs, similar to the model adopted by the Punjab government. Farmers warned that if the issue of wheat prices is not resolved, wheat cultivation could come to a halt, potentially triggering a national food security crisis. They also demanded an immediate clean-up of all drainage systems before the monsoon season and a thorough investigation into the utilization of funds for major drain projects, including the Left Bank Outfall Drain (LBOD). Farmers present at the meeting strongly protested against what they called 'artificial' water shortage in Sindh, stating that sufficient water is available in the system, yet deliberate shortages are being created to harass growers. They accused the lower staff of the irrigation department of accepting hefty bribes and selling water access by the hour. The Chamber demanded that the irrigation minister take immediate action to curb corruption and restore the weekly rotation system of canal operations. They noted that the Nara and Rohri canals currently have a flow of 10,800 cusecs, equivalent to 85% capacity, and warned that failure to implement a weekly opening and closing system would be a gross injustice to farmers. Reviewing the current wheat situation, the chamber said last year's support price was Rs. 4,000 per 40 kg, with relatively low input costs. However, this year production costs have doubled, while market prices have plummeted to just Rs. 2,200 per 40 kg. At such low rates, many farmers are likely to abandon wheat cultivation altogether. Appealing to Sindh Chief Minister Syed Murad Ali Shah, the Chamber urged an emergency meeting with all stakeholders to resolve the wheat price issue before it severely impacts national food production. The Chamber also reminded the government of a recent press briefing by APTMA's president, who highlighted the nationwide decline in cotton production. Pakistan previously produced 15 million bales, with Sindh contributing 4.5 million. However, current production stands at only 4 million bales, forcing the country to import 5–6 million bales annually at a cost of billions in foreign exchange. They demanded that the federal government impose an immediate ban on cotton imports and ensure a Rs. 12,000 per 40 kg support price for local farmers to help Pakistan regain its former production levels. The chamber further expressed concern over the lack of research on heat-resistant cotton seeds. They demanded the government import such seeds from China and distribute them to farmers in Sindh, as current seeds are not suitable for extreme temperatures. Welcoming Punjab's initiative to provide Rs. 111 billion in agricultural subsidies including Rs. 15 billion specifically for wheat grower the Chamber urged the Sindh government to adopt a similar program to support farmers in purchasing tractors and agricultural inputs. In light of the approaching monsoon season, the Chamber expressed alarm that no work has been done on major drainage systems, including LBOD the largest drainage network in Asia. They called for urgent fortification of embankments and inspection of fund usage. Similar action was demanded for Puran, Dhoro Puran, Tando Mohammad Khan Drain, MM Drain, AP Drain, and Mirpurkhas Drain to prevent large-scale flooding and devastation during the rains. The meeting was attended by a large number of farmers, including SIDA Chairman Qabool Muhammad Khatian, General Secretary Zahid Hussain Bhurgari, Khadim Hussain Bharani, and others. Copyright Business Recorder, 2025
Express Tribune
19-03-2025
- Politics
- Express Tribune
Sindh farmers stage rally against new canals
Listen to article The Sindh Chamber of Agriculture (SCA) organised a rally from the old campus of the University of Sindh to the Hyderabad Press Club to protest against the construction of six new canals on Indus River and corporate farming. Led by SCA President Syed Zainul Abedin Shah and General Secretary Zahid Bhurgri, the rally participants demanded that the federal government immediately issue a notification to halt the execution of canal projects, including the Cholistan canal, and the Green Pakistan Initiative, which were threatening the unity of the federation. They praised the Sindh government for passing a resolution in the provincial assembly against the "anti-Sindh" canals and for standing with the people of Sindh. In his speech at the press club where a large number of farmers had gathered, the SCA president stressed that for thousands of years, the Indus River had been a source of civilisation, existence, survival and livelihood. "The five million people of Sindh consider the Cholistan canal and other such canal projects as a threat to their existence. This is because the country's reservoirs do not have enough water to sustain additional canals," he said. Shah pointed out that Pakistan was a federation comprising people of distinct historical and cultural identities. "Therefore, before taking any hasty steps, the federal government must ensure that all constitutional, legal, fundamental, human, democratic and ethical values are respected. Any decisions regarding water reservoirs must be made transparently while considering accurate data and consulting all national stakeholders." As the Kharif sowing season begins, the depletion of water in the country's two major reservoirs, Mangla and Tarbela, has created a drought-like situation in Sindh. "This is the warning sign of a major crisis."
Express Tribune
12-03-2025
- Politics
- Express Tribune
Agri chamber rejects canal projects
Listen to article The Sindh Chamber of Agriculture has demanded that the federal government immediately cancel and issue a notification rejecting all six canal projects, including the Cholistan Canal and the Green Pakistan Initiative, which threaten the unity of the federation. It has also urged the Sindh government to pass a resolution in the Sindh Assembly against these canals and stand with the voice of the people of Sindh. Sindh Chamber of Agriculture President Syed Zainul Abideen Shah stated, in a press release f on Wednesday from the chamber's headquarters in Hyderabad, that the Indus River is vital to Sindh's history, civilisation, and livelihood. The province's five crore people view the Cholistan Canal and other canal projects as a serious threat to their existence, given the country's insufficient water reservoirs. Farmers, peasants, and people from all walks of life are protesting daily against these projects. Sindh symbolises a strong and united federation, he said, adding that any threat to its existence puts national unity at risk. He called on the federal government to uphold constitutional, legal, and democratic values, ensuring transparency and consultation with all stakeholders before making decisions on water reservoirs. He further warned that the people of Sindh will continue their protests until the government issues a notification rejecting the canal projects. With the onset of the Kharif season, water shortages in Mangla and Tarbela dams and inadequate irrigation water have created drought-like conditions in Sindh, signalling a major crisis.
