Fixing wheat support price
November 9th, 2012 | Technology Times | No Comments
PAKISTAN is an agricultural state, thus agriculture is the mainstay of the countrys economy. Its significance is manifold as it provides food to the people, raw materials to industry and is a base for earning foreign exchange through foreign trade. Wheat is the most important staple crop of the country. Also, the burgeoning cost of inputs had compelled the farmers to cultivate and produce for self-consumption rather than the nation. Such food scarcity had resulted in food inflation in the past. As a result thereof, the government was compelled to import wheat for meeting domestic needs and to cover the shortage on which a huge amount of foreign exchange was spent. In a major incentive to the agricultural sector and to achieve food security in the country, the federal government had fixed minimum guaranteed price for wheat crop 2009 at Rs950 per 40kg in September 2008 from earlier Rs625 per 40kg. This increase in minimum guaranteed price led to a bumper wheat crop of 24 million tons that year or three million tons more than the preceding year. As an increase in the amount, the government paid farmers for wheat, a bigger planted area, while abundant rains, new varieties and subsidised fertilisers contributed to the rise in wheat output. The minimum support price fixed in September 2008 was revised to Rs 1,050 per 40kg in October 2011, i.e., after three years. According to the media reports, there has been phenomenal increase in wheat price in international market. Also, wheat cost production has highly increased and the prevailing support price of Rs 1,050 per 40kg is not appropriate. Wheat sowing season is fast approaching in the country, especially in Sindh, while support price for 2013 crop has not been announced so far. It is, therefore, time to fix the support price for wheat crop 2013. This will help attract and encourage growers to sow wheat on time. If the government failed to fix/announce the support price, the farmers might not sow wheat grain and go to alternate crops which fetch more price than wheat.
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