Problem over wheat price

Wheat is one of the major crops of the country. It shares a large part of the GDP and is the principal source of food for the entire country. In the past couple of years there has been a swift increase in wheat prices in Pakistan causing the inflation to reach at the highest level. Over a couple of few years, the price of wheat has almost twice which depicts an adverse sign of economic stability in the country. A good number of the farmers in Pakistan are not able to get bulk number of buyers which compel them sell the wheat at lower than market government rates. The agent and middleman also play their role in making wheat out of the reach of an ordinary person and highly utilize the farmer by levying high commission rates. The economic instability at the national level and rash looting of public money has made the government to withdraw all the subsidies that the government provided on agricultural products making things deteriorate for the ordinary person. Nevertheless, the government has felt the need of the hour and is setting to control the increasing and sale of wheat from the farmer in an effort to control the price of wheat in Pakistan. Some of the major businessmen even invest in wheat seeing good growth opportunities in wheat rates.
Every time as the annual wheat harvest approaches the government quarrel with determining a procurement price for the grain which object to match the cost of inputs with the final price of flour in the market to keep it inexpensive for the large section of the citizens. As usual each year, the government is contemplating its alternative on providing subsidy to keep the prices of wheat which is the elementary component for bread to transfer on the accelerating cost to the public. The Punjab Food Authority has proposed keeping price at about Rs1, 300 per maund at the mere minimum after its earlier suggestions to enhance it to Rs1, 350 were discarded by the government. Only a couple of few months ago, the government had decided to hold for a fifth- continuous the wheat support price at Rs1,300 per kg where the government had acknowledged that farmers were earning an inadequate about 2 percent as profit. Now, the government wants to further decelerate this rate. The real reason for this is that there are some in the federal cabinet who are scared of annoying another repercussion from the citizens after it has increased fuel prices, power rates and permitted the exchange rate to go to the highest it has ever been. In this context the government will have to do whether it wants to fix a lower wheat procurement price or it is for another costly subsidy to keep the public peaceful.
Squabble over the control price of wheat persists as the federal government emerges to have discarded the Punjab provincial government’s price demand. The Punjab Food Authority is strong on its decision that the price of wheat will be established at Rs1, 300 per maund. The federal government has resolved to sell in excess of one million tons of wheat to Pakistan Agricultural Storage and Services Corporation at local rates, on which the Punjab government has stated that the government should announce the control price so that the private sector can advance with confidence. Punjab Food Secretary met with stakeholders and it was proposed that before the start of wheat purchase, the government should announce the price so that flour mills can buy wheat directly from farmers. Quarrel over views were also observed in the Punjab cabinet, where some members were of the opinion that the wheat price might rise high in case the government fix a high control price, which could lead to a strong public criticism.
Farmers in Sindh are anxious on provincial government step to halt buying present season wheat crop accumulate in farms with prices going towards a smash. Sindh province is anticipating a plentiful crop of around 4.2 million tons. The farmers are demanding to raise support price to about Rs1, 400 from Rs1, 300 per 40 kilogram last year. The cabinet was briefed that Sindh Food Department had taken loan from several banks of Rs135 billion for the purchase of wheat in Sindh, of which Rs35 billion were paid back thus far. The procurement process of the government was never clear and open and had defects, even then it kept the market prices under command and poor growers were not fully utilized. Sindh had a marvelous wheat crop, as weather remained advantageous because of greater availability of water and rain in some areas. Stakeholders were of the opinion that Sindh government could export the wheat, and keep the purchase from growers unharmed at the support price, as prices in the international market and domestic market have gone to the identical position. Pakistan at this position could utilize the Afghanistan market through its land route. Sindh and Punjab in the past sold wheat to flour mills at reduced prices to reduce the final sale price, owing to which an extra financial load of billions had to be allowed.

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