There are 2 types of cropping season in Pakistan|

WHEAT CRISIS IN PAKISTAN

INTRODUCTIONIn Pakistan, wheat being the staple diet is the most important crop and cultivated on the largest acreages in almost every part of the country. It contributes 14.4 percent to the value added in agriculture and 3.0 percent to GDP. Pakistan is the world's sixth largest producer of wheat, according to the Ministry of Food and Agriculture, and is a nation of more than160 million people who consume 25 million tones of wheat every year.

WHEAT SETUP IN PAKISTANArea and production: Pakistan wheat production and yield

Year Productionyield

1980-81114751643

1990-91145651841

2000-01190242325

2002-03191832388

Wheat growing regions in PakistanWheat is grown all over Pakistan. Province wise Punjab dominates both in area and production.

Province wise percentage of area and production of wheat in Pakistan, 2002 03 ProvincePercentage of total area under wheatPercentage of wheat produced

PUNJAB7679

SINDH1111

N.W.F.P96

BALOCHISTAN44

PAKISTAN100100

Pakistan has been divided into ten production zones because of great agro ecological areas where wheat is grown. The zoning is mainly based on cropping pattern, disease prevalence and climatologically factors. However, production zones need to be revisited. Wheat conditions for cultivation

Percentage cropped areaPercentage food grain acreageSeason SoilSowing periodHarvesting period

3767Rabi- required mild temperatures and low rainfallAlluvial loamy soilOctober-NovemberApril-May

RESEARCH AND DEVELOPMENT INSTITUTIONS ON AGRICULTURAL:The need for Research and Development (R&D) institutions on agricultural mechanization was established relatively late in Pakistan. Currently, a Farm Machinery Institute (FMI) at Islamabad under Pakistan Agricultural Research Council (PARC) at Federal level, Agricultural Mechanization Research Institute (AMRI) at Multan under the Government of Punjab and Agricultural Mechanization Research Cell (AMRC) at Tandojam under the Government of Sindh are solely engaged in farm machinery research and development work. Furthermore, Centre for Agricultural Machinery Industries under the Government of Punjab is also engaged in farm mechanization promotion activities.

Wheat crisis in Pakistan Wheat is a major crop that is produced in the country, but unfortunately, there is wheat shortage, that it is not available in the market, if available is on higher prices.The Pakistan Government increased the minimum price for procurement of wheat by almost 38 percent in 2008. ISSUE OF WHEAT SHORTAGE IN PAST:Wheat shortages in Pakistan have taken place four times. Causes of the shortage have been the same that is smuggling to neighboring countries. But none of those shortages were as acute as now.

First in 1953, of Khawaja Nazimuddins Prime Minister Ship, the food shortage hit the country; we borrowed $ 10 million from the World Bank and purchased wheat from Canada on loan. The total cost of wheat imported from Canada was $ 35 million. Second in 1967 wheat shortage took place during Ayub Khan days, when we purchased wheat worth Rs 110 million (in those days, one corer Rupees used to be equal to $ two million, whereas now one million dollar is equal to Pak Rupees three million. Third time it hit Pakistan in Zia ul Haq days. Smuggling out of our wheat to India, Afghanistan, Iran and Central Asia was the cause of second wheat shortage. Fourth time it hit Pakistan during Pervez Musharaf days. Wheat was smuggling out and too much hoarding of wheat.

SELF SUFFIENCY IN WHEATAlthough the wheat growing areas have been steadily increasing over the years, Pakistan is still not sufficient in wheat production. Pakistan has to import wheat in 43 of the 53 years between 1947 2000. Since 1988 89, Pakistan has not been able to meet its requirements. Infact in 1999 2000, 2 million tones of wheat had to be imported. Unfortunately, wheat production cannot keep pace with the food needs of the growing population.

Why their is insufficiency of wheat?

Pakistan has improved its productivity level of wheat from 1950-07; the productivity level is recorded as 3.9-23.7 i.e. 6 times increases in production in wheat crop. But the issue of wheat shortage is still going in the country wheat is still un sufficient and if available in on higher price. There are black sheep in every field which disturb the market equilibrium.The main reasons are;- Smuggling - of our wheat to neighboring countries India, Afghanistan, Iran and Central Asia was the cause of second wheat shortage. (It is said that there is no single mill in Afghanistan which grinds wheat into flour, and it is smuggled there in the form of flour.)

UG99- The rust UG99 from Uganda spread into Kenya and Ethiopia then crossed into Yemen and has recently been reported in Iran. This proximity presence and its wind borne spore spreading nature threatens Pakistan wheat areas particularly Sindh and lower Punjab where stem rust is to be a problem. Now it is said that they have control over the some extent ad 2008 crop will not affected by UG99.

Pakistan had a bumper crop last year but instead of holding some of the wheat in storage; it exported much of the excess.

Black marketing/Hoarding- Due to the shortage of wheat. Farmers dont sale wheat, and wait till the demand gets high because of low supply in a region, which ultimately increases the prices.The question to ask, when we face such shortages is why Pakistan cannot device a wheat / agriculture policy to become a wheat basket in the region. We have all the elements for it.

Pakistan has one of the largest alluvial lands in the world, all of which can be used for cultivation if this possibility is given serious thought.MEASURES TAKEN BY PAKISTAN PRESENT GOVERNMENT (2008) Subsidy: By watching the current situation of shortage of wheat, Pakistan government forced flour mills to sell flour on reasonable old rates but they refused because they already suffering from loss.So the governments imported wheat on high prices from United States and other countries. The imported wheat is given to the flour mills and subsidized it (giving relief to flour mill owners to sell flour on reasonable rate), Benazir agriculture card scheme - Minister for Food and Agriculture Nazar Muhammad Gondal has expressed the hope that Benazir Agricultural Card Scheme will help farmers to increase agricultural production. The scheme had been introduced to facilitate small farmers, while the card would be valid for three years. Interest rate on the credit will be as per the rate applicable on production loans.There will be no limit on the number of transactions through the card and require no more than one interface of the farmer with bank officials President Asif Ali Zardari has also directed the Ministry to import reconditioned tractors for farmers on cheaper rates. Federal Minister for Food and Agriculture Nazar Muhammad Gondal along with Minister for Industry Mian Manzoor Ahmed Wattoo also announced the decision of fixing Rs 660 per bag of urea as compared to the market price of Rs 950 per 50 kg bag to break the cartels and end black marketing of urea. GLOBALLY AFFECTED CONDITION OF WHEATThe rich will suffer and poor may die, where and whyAmerica- according to ABC NEWS cost of pastries is now very high. 15 pond bag of flour which was previously of $15 now it is $40.

Not only America sansalvido, chille and Germany, Egypt, Africa are also suffering from wheat crisis.

Chille bread is most popular in chille.they are the fifth highest consuming nation of flour. Increase in price affects the whole country, the price of kilo bread rise by 10 cent and also the bakery goods.El-Salvador according to HECHOS television on FEB 21, 2008 bakery prices increased tremendously. The shopkeeper of one bakery said two years back 21 dollars for 100 pound of flour, now they pay 45.According to BBC NEWS on 13 Sep 2007, even the noodles lover are also suffering According to KBS NEWA South Korean people consume 3.6 million wheat per yr now the increase in price is also a major problem for them.In Egypt potencial highly prices are politically problem, according to south ASIA NEWS LINE and ALJAZEERA NEWS on 27 June 07 , breed is major part of Egyptian diet, bread is a matter of national security because 20% people live below poverty line and they relay on bread.In Africa high prices means starvation. According to BBC NEWS on 18 October 2007 starvation is going on, about 8050 million people are given aid by UN and many other countries. Corn and wheat both are expensive here.CONCLUSIONWheat shortage is not only the problem of Pakistan but many other countries are also suffering from the wheat crisis. In Pakistan the major reason of wheat shortage is smuggling and black marketing,

The question to ask, when we face such shortages is why Pakistan cannot device a wheat / agriculture policy to become a wheat basket in the region. We have all the elements for it. That is Pakistan has one of the largest alluvial lands in the world, all of which can be used for cultivation if this possibility is given serious thought.

NEWS UPDATES ABOUT WHEAT ISSUE:

Benazir agriculture card scheme to help raise production: GondalISLAMABAD (December 18 2008): Minister for Food and Agriculture Nazar Muhammad Gondal has expressed the hope that Benazir Agricultural Card Scheme (BACS) will help farmers to increase agricultural production. Talking to PTV, he said the scheme had been introduced to facilitate small farmers, while the card would be valid for three years.

"Interest rate on the credit will be as per the rate applicable on production loans. There will be no limit on the number of transactions through the card and require no more than one interface of the farmer with bank officials," he added.

The loan will be disbursed against every crop with a grace period of 90 days. Gondal said 20,000 tractors would also be provided to farmers on subsidised rates, adding that Rs 200,000 subsidy on purchase of a tractor would be provided to the farmers.

President Asif Ali Zardari has also directed the Ministry to import reconditioned tractors for farmers on cheaper rates. To a question, he said an increase in the official support price (Rs 950 per 40kg) had encouraged the farmers to sow wheat on million of acres and the country would be able to achieve the 25 million tons production target. He said Trading Corporation of Pakistan and Pakistan Agricultural Storage and Services Corporation had been directed to purchase rice from the farmers.

Courtesy Associated Press of Pakistan

Black-marketing may hit wheat yield

By DAWN news

MULTAN, Dec 17: Wheat growers in southern Punjab are finding the going hard as they claim that urea fertiliser has disappeared from the market.

According to them, these are the crucial days for utilisation of urea.

The shortage owing to manipulation of market forces is leading to the hike in fertiliser prices. Its black-marketing was at its peak when the wheat sowing gained momentum in southern Punjab.

A number of farmers fear less wheat yield this year owing to high urea price, besides shortage of water and low cotton rates.

The government had set the control rate of urea at Rs650 per bag, but dealers were allegedly fleecing the growers.

Agriculture experts and farmers attributed this shortage and hike in prices of fertilizer to lack of governance.

Abdul Rasheed, a farmer from Shujaabad, complained that the urea black-marketing was increasing and it was being sold at high prices against its controlled rate.

He said small growers were victims of acute shortage of urea.

A farmer from Rahim Yar Khan, Muhammad Sharif Dhareja, said farming had become nearly impossible in the face of the rising prices of various fertilizers, seeds and pesticides.

He said urea was hardly available for Rs850 per 50kg bag, which was beyond the purchasing power of poor farmers.

Hazoor Bakhsh, a progressive farmer from Kot Sultan, Layyah, said wheat sowing was at its peak but neither seed nor urea was available in the market, as profiteers had stocked the commodities for black-marketing.

Kisan Board central secretary-general Jam Hazoor Bakhsh said dealers were keeping fertilizer at unidentified places in villages to avoid their sale at controlled rate.

EDO (agriculture) Zaffaryab Haidar Naqvi confirmed the shortage and black-marketing of fertilizer. He said besides activating field assistant staff, he himself was conducting raids on shops and distributing fertilizer among farmers at controlled prices.RECENT ARTICLES ON WHEAT ISSUE:

Wheat production target hard to achieve, experts believe(By Nauman Tasleem)

LAHORE (December 19 2008): The wheat-sowing target might be achieved this year but the wheat production target would not be achieved due to delay in wheat sowing and other factors, the farmers associations and agriculturists informed on Thursday.

However, the MINFAL official's claim is to the contrary as MINFAL believes that the wheat production target would be met.

They said that the government has set target of sowing 22 million acre land while the wheat production target is set at 25 million tones. However, till end of November only 50 percent area could be brought under cultivation. "With further delay the yield of wheat would be affected and as a result, the production of wheat would drop," said Dr Mohammad Tariq Bucha, Director and Honorary Chief Co-ordinator Farmer Association Pakistan (FAP). He said that the sowing of wheat in a number of districts is quite positive but delay in sowing would affect the production. He said that wheat sowing has been delayed in cotton and sugarcane areas. "Ideally, wheat should be sown till 20 November, as in this case the wheat yield comes very good," said Bucha. "Unfortunately till that date only 28 percent area could be brought under cultivation," he lamented. "With each passing day, the yield reduces by 16 Kg per acre per day thus wheat lost per acre in one month would be around 480 Kg," he estimated. Bucha said that the target of 25 million tones wheat production is very optimistic approach by the government officials. "I wish we achieve the target but my calculation tells that even 20 million tones would be a hard task to achieve," he said.

The average yield in Pakistan is around 25 maund per acre.

Agri Forum Chairman, Ibrahim Mughal said that the wheat-sowing target has been achieved by around 80 percent but forecasting about production is difficult. "There are multiple factors, which could affect crop including weather in the coming months and availability of water," he said.

Qadir Baksh Baloch, Ministry of Food and Livestock Development Commissioner for Crops said that 95 percent sowing area has been achieved and the government is very optimistic to achieve the wheat production target. "The wheat sowing starts on 20 October and ends on 10 January therefore the wheat area would be achieved," he said. He believed that current rains would also help in better yield.

It is pertinent to mention that last year Qadir Buksh Baloch while talking to Daily Times has said that the wheat area and production would be achieved.

According to Economic Survey of Pakistan, the government for 2007-08 has set the target of sowing 21.1 million acre and production at 24 million tones but only 20.8 million acre were sowed and wheat production could not cross 22 million tones.

Courtesy Daily Times

US sanctions $48 million to import wheat on deferred payment(By Zafar Bhutta/Asma Razak)ISLAMABAD (December 19 2008): United States of America (USA) on Thursday sanctioned 48 million dollars to provide 200,000-250,000 tons of wheat to Pakistan on deferred payment. Trading Corporation of Pakistan (TCP) will float tender on Friday to import the said wheat from the USA on deferred payment at the rate prevailing in American market.

Addressing a joint press conference, Federal Minister for Food and Agriculture Nazar Muhammad Gondal along with Minister for Industry Mian Manzoor Ahmed Wattoo also announced the decision of fixing Rs 660 per bag of urea to break the cartels and end black marketing of urea. Gondal said that USA had sanctioned 48 million dollars to provide 200,000-250,000 tons wheat to Pakistan on the deferred payment under GSM scheme.

He said that TCP would float tender on Friday to import the wheat from USA. He said that government had fixed the urea price at Rs 660 per bag after a meeting with fertilizer manufacturers here on Thursday. He said that government would offload 290,000 tons urea fertilizer in the market by December 31 to break the cartel of the market players. Private sector will offload 100,000 tons urea fertilizer in the local market to maintain balance between supply and demand.

During the meeting with manufacturers, government has decided to purchase 50 percent urea from the manufacturers during the coming months. He said that total production of fertilizer manufacturers would be 0.7 million tons urea and government would purchase 450,000 tons from them in the coming months. Government would procure 100,000 tons urea from fertilizer manufacturers in the current month whereas 350,000 tons urea would be purchased during January-February 2009. Government would get the urea from the fertilizer manufacturers at Rs 660 per bag whereas the imported wheat price is Rs 650 per bag. The minister said that government would charge Rs 10 per bag additionally on the imported wheat to land at Gwadar.

He said that government would import 390,000 tons urea by January 15 and 190,000 tons urea would reach Pakistan by December 31 to distribute among the farmers. The minister noted that government would float another tender of 350,000 tons urea import on January 15 to ensure the availability for farmers. He warned the black marketers that they will be dealt high-handedly if involved in creating shortage. He said that provincial governments had been directed to lodge FIR against the black marketers.

Manzoor Wattoo said that government was taking different measures to make Pakistan self-sufficient in the wheat. He said that government had spent Rs 64 billion on the wheat import, which could save Pakistan to go to IMF.

He said that government had allocated Rs 32 billion subsidy for the fertiliser during the current year and had given Rs 27 billion subsidy to the fertiliser manufacturers and importers of DAP after capping the price at Rs 3,050 per bag.

Wattoo said that it was decided that government would take action against the dealers who would force the farmers to buy DAP for urea bag. He said that industry department and National Fertilizer Company (NFC) would purchase 50 percent urea production from the fertilizer manufacturers as per decision taken here in the meeting.

He said that local urea production would be seven million tons and government would receive 450,000 tons from them to meet the farmers' requirements. He said that dealers were providing urea at Rs 850 to Rs 950 per bag due to black marketing and now government would provide urea bag at Rs 660. He said that a committee headed by federal minister for industry would determine fertilizer prices in future.

Courtesy Business Recorder

New wheat crisis plagues world food supply

Posted Mar 27 2008, 03:46 AM by Jon Markman

Filed under: investing, Anheuser-Busch, McDonald's, economy, Jon Markman

If it seems like you are paying more for your cereal, beer and pizza lately, shake your fist in the direction of Pakistan, Uganda and Argentina, because a weird confluence of international events are combining to slash the world supply of wheat and boost prices. The downside of globalization is that a crop failure 10,000 miles away can lead to pricier brewskis here.

It's actually a lot more serious than that. The New Scientist magazine reports that a wheat disease that started in central Africa actually threatens to destroy most of the world wheat crop, leaving millions to starve. A fungus called Ug99 has already spread from Africa to Iran and is bearing down on Pakistan, according to the report. This is bad news because Pakistan and Punjab wheat is extremely important to the entire food chain of the densely populous plains of South Asia.

According to reports, scientists hope to slow the spread of Ug99 by spraying new forms of fungicide but the only real firebreak will come when agronomists are able to create Ug99-resistant strains of wheat over the next few years. The disease, which is said to be a super-strong strain of black stem rust, first came to light in Uganda in 1999 and has since ruined crops in Kenya, Ethiopia and Yemen. Now winds are expected to take the spores to Egypt, Turkey, Syria and Iran. Chinese scientists are said to be on a crash program to develop Ug99-resistant wheat strains before the disease ravages its already weakened croplands.

Meanwhile, down in Argentina, a three-week protest by farmers has curtailed shipments of wheat into supermarkets, pushing that country into its worst political crisis since 2002. News media report that thousands of farmers are withholding meat and grains from wholesalers and blocking country roads to oppose a hike in export taxes. Argentinas president, Cristina Kirchner, has accused farmers of extortion, while protesters fill streets, banging pots and pans.

Food shortages in Buenos Aires are worsening, and the media reports that shops have run out of beef and chicken, while fruits and vegetables are soaring in price. The government is said to be digging in its heels on the tax increases that it believes are necessary to support social programs such as fuel and health care subsidies, while farmers say they are being unfairly targeted. The upshot is that the turmoil has also curtailed exports, putting strains on world wheat prices.Pakistan launches crash program for wheat crop in quake-hit areas

Posted by Kashif Aziz

December 18, 2005

Pakistan has launched a crash program for wheat crop in a 43,000-acre land in the earthquake-devastated areas of North West Frontier Province and Pakistan-administered Kashmir.

Agriculture Minister Sikandar Hayat Khan told the Lower House of Parliament on Thursday that under this program, seed and fertilizer have been provided free of cost to farmers with the collaboration of the United Nations aid agency.

In response to a question by an opposition lawmaker Samia Raheel Qazi, he said a total of 28,000 acres of farming land in NWFP and 15,000 acres in Kashmir were devastated by the quake.

The killer quake struck Pakistans NWFP and Kashmir on Oct 8, killing over 73,000 and injuring more than 100 thousand people, in addition to destroying standing crops and cultivable land.

The minister added that the government was now working on a plan to ensure provision of seed and fertilizer to farmers in the affected areas for the next crops, starting from March.

Flour millers propose setting-up wheat board By Nauman TasleemDecember 18, 2008 Thursday

LAHORE :In a letter to the Prime Minister, flour millers have proposed establishing a wheat board for dealing any possible flour crisis in the future, industry sources informed Daily Times on Monday. The millers said that they have proposed establishing the said board to take stakeholders of the commodity into account. They said that farmers, flourmills, government and consumers are the major stakeholders of the commodity and they should be counselled before taking any decision. They said this would also help the government in getting actual production of wheat rather depending upon fictitious figures. Millers said that the bureaucracy has in the past often taken such decisions that have ultimately created wheat and flour crisis in the country. They said that through wrong figures, some mischievous elements misguided the government to provoke it for exporting wheat and this thing severed the flour crisis. The ongoing problem started when the government exported one million tonnes of wheat, said a flour miller adding that even Pakistan Flour Mills Association tried its best to stop the government from wheat export but the bureaucracy turned a deaf ear to their requests. He said that wheat export remained on cheaper rates and this thing played havoc. The supplies of wheat in international market is less and now the rates have sky rocketed, he said adding that a multitude of wrong decisions wrong figures, export and now import all these factors showed that all the things were deliberate and some hidden forces forced the government to make faults. He said that flourmills owner said that if the bureaucracy has listened to the PFMA then such a situation would never have occurred. Reportedly, political figures, both on the treasury and the opposition benches, have been involved in the ongoing wheat and flour crisis. Federal and provincial governments have held each other responsible for the crisis. Punjab Chief Minister Pervaiz Elahi and Federal Minister Jehangir Khan Tareen blamed each other for not taking appropriate steps on right time, said a flourmill owner adding that the wheat board would help in sorting such issues. The current wheat crisis has left people in a fix, who were bound to buy wheat at very high prices. Chairman Zonal Committee of FPCCI on Flourmills Industry and former chairman of Pakistan Flourmills Association, Punjab, Bilal Aslam Soofi said that the millers, in a letter to the prime minister, have requested him to form Pakistan Wheat Board on an emergency basis.

Karachi without flour supplies for three days

By Irfan Naqvi

Friday, May 16, 2008

KARACHI: Flourmills have not supplied bags of flour to retailers for the last four days, causing an artificial flour crisis in Karachi, and according to retailers, the middlemen have informed them that supply will be resumed shortly but prices will shoot up to Rs300 per 10-kilogramme bag.

Former Pakistan Flourmills Association Sindh circle Chairman Muhammad Yousaf told Daily Times that wheat is available in large amounts in interior Sindh but the government has not allowed its transportation to Hyderabad. I have the capacity to crush 1,800 bags of wheat everyday, but on Wednesday I hardly managed to produce 450 bags while no trading took place on Thursday, he said.

The government has directed flourmills not to purchase wheat at rates above Rs 1,800 per 100 kg in an effort to maintain flour prices. At the same time, the ex-mill price (price at which flour is bought from the flourmills) was fixed at Rs 220 per 10-kg bag at a meeting held last Monday.

The ceiling fixed on the purchase price of wheat has curtailed all procurement of wheat for the last four days, since flourmills cannot purchase wheat at rates above Rs 1,800 and rates in the open market are well above that. It goes without saying that ending wheat transactions will lead to a flour shortage in the city, said Yousaf, adding that the Punjab flourmills have announced they will go on strike from May 17 but flourmills still deem it necessary to keep crushing wheat to flour so that the city be saved from turmoil. It is now up to the government to decide what to do next.

In Karachi, wheat is not available and flourmill owners have not procured a single kilogram of wheat from the open market. So far, they have been purchasing wheat from interior Sindh, but there was no trading on Thursday. There are around 73 flourmills in city and only a few have about two days stock of wheat left, he added.

All Pakistan Flour Mills Association Sindh circle Mirpurkhas region Vice-Chairman Waleed Malik told Daily Times that the government should extend the limit of wheat procurement to 600,000 metric tons and allow flourmills to buy the required wheat directly to overcome the flour crisis and avoid price hikes in future.

The power crisis, increases in fuel prices and the restriction on flourmills from buying wheat at above Rs 1,800 are the main reasons for the current crisis, said Malik, adding that the government has fixed a daily upper limit of 600 bags of wheat purchased from the open market. Theses 600 bags of wheat make 60 tons of flour. The need of flour in city is at least 4, 000 tons of flour daily.

Sources in the open market and the flour business told Daily Times that the trend of wheat and flour transportation and procurement seems to be creating the flour crisis anew. The government has not allowed flourmills to buy wheat at above Rs 1,800, wheat stayed above Rs 2,000 in the open market on Wednesday.

All Karachi Atta Chakki Operators Association General Secretary Muhammad Anis Shahid said that private chakki operators have closed their stones for the last three days due to non-availability of wheat from the open market. There are over 2,800 private chakki operators in Karachi, of which around 1,250 are routinely operational. The chakki flour rates prior to the closure of stones had been raised from Rs 250 to Rs 280 and Rs 290 per 10-kg bag due to a dearth of wheat.

by ahsan ali mangifor tbl

Pakistan is the world's sixth largest producer of wheat, according to the Ministry of Food and Agriculture, with an annual production of over 21 million metric tonnes (MT). The US Department of Agriculture estimates Pakistan's rice consumption to be over 2.5 million MT. With exports of about the same quantity, Pakistan is capable of feeding its own population. Faced with such positive facts, we all wonder about the exact reasons for the prevailing wheat crises, which has existed in varied degrees for over a year now.

The Pakistan Government Wheat PolicyBefore delving into the crisis, it is important to present an overview of the prevailing Government wheat policy (also known as Food Security policy).

The Government is obliged under the constitution of the Islamic Republic of Pakistan for the provision of essential food at affordable prices to the population throughout the country (please hold back that snicker and eye-roll).

To fulfill this responsibility, provincial governments have setup food departments for the purchase and storing of wheat stocks at government silos, which are then released to flourmills so as to keep wheat and wheat flour available at an affordable price throughout the year.

Procurement and storage of wheat by the Government is necessitated due to the peculiar nature of agriculture produce: wheat is harvested once a year during April-May. Thus, there is a glut of wheat inherent within the system. In the commodity markets every cultivator is anxious to sell his produce and clear liabilities (such as fertilizers, seeds) and take any well-deserved profit back home.

However, arrival of the crop creates disequilibrium in the market benefiting the purchaser who tries to bring the prices down. The notorious middlemen enter here. Thus the government also enters the market with an announced minimum price and ready to buy all the wheat being offered. This sets a floor price for wheat in the time of plenty and curtails possible exploitation of the farmer, thus influencing cultivator's decision to grow wheat again, since it is profitable. Wheat storage is a costly business in terms of the opportunity cost of investment, storage, fumigation and transportation charges.

Thus, as months pass, overheads on wheat stocks result in an increase in prices and the private sector brings its wheat in the market based on their comparative holding power. Moreover, the government also sets its own release price for wheat, which only partially offsets overhead costs on storage. This price serves as the ceiling price in the wheat market and private traders clear off their stocks before this limit is reached. This policy is in operation with relative success for the last 25 years except for the times when the wheat crop in Pakistan has failed.

Why the Crises?Why has there been a crisis in the supply of wheat and a spike in prices since last July, when in fact Pakistan produced wheat comparable to its requirements and imported 1.8 millions MT of wheat during December 2007?

Different quarters have given different alibis including misrepresentation of crop size by Government to boost GDP growth figures and concurrent permission to export wheat (700,000 MT was exported in May-June 2007) which later adversely affected market sentiments causing panic buying by public and hoarding by traders.

Another version blames the Government for failure in assessing changes in the local and international situation; increased wheat requirements as poultry feed (due to corn crop failure) rising to 1500,000 MT as per estimates of experts.

Another postulates that people are switching to wheat as rice prices sky rocketed due to extensive export of the commodity.

A fourth proposed reason is the increase in international wheat prices peaking at an unprecedented $550/MT, according to the Chicago Board of Trade.

Unrealistic agriculture-related public policy also came under criticism. An increase in the cost of production, due to the doubling of fertilizer costs and increased petroleum prices, also played a role in disrupting the tested Government wheat policy as purchase prices set by the government did not cover the cost of production, thus incentivising the growers to: either retain their crops or try selling them at higher prices to private traders if possible.

World Wheat Whereaboutswhile all the above arguments hold; we are still at a loss to explain fully the current happenings in the local wheat sector.

The world wheat situation has improved this year. World net wheat production is estimated to be 8 percent higher this year than last year. Estimated in 2008 by the U.S. Department of Agriculture, at a record 656 million MT for 2008-09 against total consumption of 642 million MT world wheat stocks grew from 110 million MT to 124 million. MT. There has been record production in Canada, EU, U.S. and Russia. Australian produce is estimated to double (from 12 to 24 million MT) after consecutive crop failures in the last two years. India, with 76 million MT of home-grown wheat, has made it clear that it will not import wheat this year.

Apart from Pakistan, which has announced its intention to import 2.5 million MT of wheat during 2008-2009, there is no non-traditional buyer in international markets for wheat to pump wheat prices up.

All factors point at easing of international wheat prices in the coming months. Thus, the present wheat situation in Pakistan is not due to the global wheat scene as is oft-attributed by seemingly guilty quarters.

Current Wheat Situation in PakistanThe Pakistan Government increased the minimum price for procurement of wheat by almost 38 percent in 2008. The aim was to offset price escalations in agricultural inputs and increase returns for the growers.

This is the single largest increase the Government has initiated in the minimum procurement price of wheat in the past twenty five years.

Despite reservations shown by several growers' organizations, experts are of the opinion that increase in the procurement has benefited the growers by increasing the returns on their produce.

However, in light of the prevailing situation, private traders are buying wheat at rates much higher than those set by the government. Flourmills are finding it difficult to buy wheat from open markets immediately after harvesting season. Field evidence suggests that bigger growers are also retaining (read: hoarding) their produce in the criminal hope of better prices in the future. The situation is an aberration to normal market dynamics and it is evidence that the government's efforts and its policy on wheat are not effective. The world wheat situation has negligible bearing, if any.

This change, where open market wheat prices do not correspond to the arrival of new harvests, has been witnessed since 2007.

The government picks up 30 percent of the country's total marketable wheat (that is, 50 percent of total crop as per APCOMS estimate). For 2008-2009 this comes to Rs. 102 billion at a fixed purchase price of Rs. 15,630 per MT. Until May 20, 2008, total credit received by private traders from the banking system for wheat purchases in only Rs. 210 million. Food Departments of two provinces (Sindh and Punjab) complain of hoarding of wheat by big farmers and traders who, according to them, until a few years back, could not retain big quantities of wheat even for a couple of months. This shift in the market situation points to the fact that new or non-traditional players have entered wheat market with huge funds at their disposal which they can park for a much longer time, for larger gains. While it is quite difficult to estimate actual amounts belonging to local investors which have left Pakistan bourses since February 2008, it is a substantive amount (KSE 100 has lost more than 3000 points since mid- April). With no substantive increases in the call and time accounts of our banking sector, it is quite plausible that this money has found better avenues and high returns in commodities sector (of which wheat is the biggest). Wheat, with its highly inelastic demand makes it a very suitable target for highest gains in the shortest time period, especially when the structural constraint of the wheat crop size, which is just enough to fulfill the national demands, lacks any cushion to ward off speculative trading in wheat.

The bottomline: regulatory bodies must shape up and step up. Commodity trading has a very real, direct human element and questionable business practices must be curbed to avoid myopic monetary gains at the cost of mass-scale manipulation and suffering of who it all boils down to: real people.UG99 not present in Pakistan, bumper wheat crop expected

By Ijaz Kakakhel

25 March 2008

ISLAMABAD: Current wheat crop (2008 harvest) will not be attacked by UG99, as the race is not in our terrain. Experimental tests of the local stem rust strain found in Sindh is not UG99 as this local race has not attacked a wheat test variety unequivocally susceptible to UG99 in field and controlled environmental testing conditions.

Stem rust on wheat has caused international concern due to its occurrence, damage potential, systematic spread across wheat growing areas in several countries coupled with the threat it poses to Pakistan and countries beyond our borders. The rust UG99 from Uganda spread into Kenya and Ethiopia, then crossed into Yemen and has recently been reported in Iran. This proximity presence and its wind borne spore spreading nature threatens Pakistan wheat areas particularly Sindh and lower Punjab where stem rust is to be a problem.

The situation is more acute as Pakistani wheat germplasm tested in Kenya over the past few years did not give encouraging signs that our varieties possess adequate resistance levels to combat the race posing the threat. Currently we are more prone to be affected with this danger at our footsteps than 2005. Thus volatile efforts are needed to be in place to address the perplexing situation.

However, gauging the swift move of the pathogen into Yemen and now into Iran compels Pakistani researchers to enhance efforts to protect national wheat productivity over the next crop cycle (2008-09). The Pakistan Agriculture Research Council (PARC) / NARC and national wheat programmes are pursuing the task diligently across three scenarios. The first is via introduction, adaptation and release of high yielding germplasm selected from the elite bread-screening nursery provided to Pakistan by CIMMYT, Mexico.

These have resistance to UG99 based upon testing by CIMMYT scientists and their colleagues in Africa hot spots. The second tier of lines are those that are present in the International stem rust screening nursery which are excellent candidates to be used in any national wheat programme that targets on recombination breeding around efficient breeding strategies for swift outputs.

The third route is to exploit the identified genes for resistance reported by CIMMYT and collaborators aided by marked / linked genes via efficient breeding technology. The additional latent phase is a programme that can harness unique resistance diversity of wheat relative species through international testing in UG99 hot spots and then exploiting this diversity in national recombination programmes.

Pakistani researchers are actively engulfed in integrated activities to combat the pathogen. The know how is perfectly in place and the task ahead chalked out with the facets of scientific cooperation, financial assistance and political will all operating in tandem.

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