February 21, 2011

Wrong decisions may trigger another wheat crisis



SPECIAL REPORT ISLAMABAD: The food security risk in Pakistan is brewing up with the passage of time as the government’s food stocks management team looks strayed and directionless having no broader vision about the exact quantity of especially wheat as well as the estimates of new crop production in addition to having no idea of public sector departments’ food storage capacity.

Similarly, on the basis of simple estimates the relevant official authorities start mulling to allow wheat export before achieving the national procurement targets by public sector departments.

Past experiences show that the inability of successive governments in procuring extra wheat and allowing the commodity’s export had created drastic gap between supply and gap in the country, forcing the government to again import wheat from the international market on higher prices to meet the domestic requirements.

The Punjab Food Department has the maximum storage capacity of about 2.18 million tons wheat while the Pakistan Agricultural Storage and Services Corporation (Passco) can store only up to 0.8 million tons. The available storage capacity of the food department is less than two million tons this year due to carryover stock while Passco surprisingly has no capacity for storing wheat this year as its warehouses are occupied with about 700,000 tons of rice. The Sindh Food Department also has negligible storage capacity.

Contrary to this reduced storage capacity, the procurement target of provincial food department this year is six million tons while Passco has been given the task of buying two million tons of wheat. The procurement target of the Sindh Food Department is 1.2 million tons.

“This estimated procurement data shows that about 80 per cent of procured wheat, if done so, will be stored in the open godowns or in the rented warehouses, thus exposing the stocks to multiple risks,” a source in the provincial food department commented on condition of anonymity.

He said that private godowns look reluctant to offer storage facility mainly due to the low rate of official rent, which is still a major concern especially for the Punjab Food Department.

Market observers say that rented godowns is not a permanent solution as the government should increase the wheat storage capacity in the public sector.

“The federal government will have to give a go ahead to Passco’s PC-I for construction of silos having capacity of 0.5 million tons,” they said adding that the relevant bureaucrats are sitting on another proposal of Passco to build godowns with a storage capacity of 1.1 million tons.

This is to be mentioned here that wheat sowing area has shrunk by 3.5 percent to 21.75 million acres for the upcoming crop as compared with 22.48 million acres in the previous season.

Experts say that the government should come up with the clear estimates about the wheat stocks before taking a decision to allow wheat export as any mishandling of this sector would cost especially the general masses heavily in terms of price wheat prices.
Wrong decisions may trigger another wheat crisis

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