Sindh farmers forced to sell wheat harvests to middlemen at lower rates as govt delays procurement

• The majority of wheat growers in Sindh have been forced to sell their harvests to middlemen at lower rates.
  
• This happened due to a delay in procurement from the Sindh government.
• On the other hand, the Sindh agriculture minister says 12 procurement centres were established in Badin district.

KARACHI: The provincial government couldn’t begin the procurement drive on time, forcing majority of the wheat growers in Sindh to sell their harvests to middlemen at lower rates, The News reported on Friday.

Compared to the federal government that was giving a price of Rs1,800 per 40kg, the provincial government’s rate was higher. 

However, the growers sold their crop to investors at around Rs1,850 to Rs1,900, as the provincial government was again late in procurement, said wheat grower Nisar Khaskheli.

He said that usually the procurement drive by the Sindh food department stabilises prices in the market but this year only 30% of growers have wheat with them, while others had already sold it to middlemen or investors at lower rates than the support price of Rs2,000 per 40kg.

“This year, winter duration was short, but extreme cold and summer came early. Thus, crop went on harvesting earlier than last year,” he said.

 “We don’t have holding power. So, we sold it at Rs1,900 per 40 kg to the investors. This is an upper Sindh situation. Lower Sindh sold it relatively earlier. They even sold out at Rs1,800 to Rs1,850. Now, only Larkana, Jacobabad, and Kashmore districts are left. But their wheat goes to Balochistan and Afghanistan," the wheat grower added.

On the other hand, Sindh Minister for Agriculture Ismail Rahu said the province had procured 120,000 tons of wheat by Sunday, April 18.

Twelve procurement centres were established in Badin district, lower Sindh, Rahu said in a statement.

Growers argued the majority of the growers in lower Sindh, Badin, Sujawal, and Thatta districts had already sold their crop to the investors and middlemen at lower rates.

'Sindh govt won't be able to meet the target this year'

Khaskheli said the Sindh government would not be able to meet the target this year. 

"They can purchase from Punjab’s districts, which are adjacent to Sindh at Rs1,900. The official rate there is Rs1,800. The benefit would be transferred to growers of Punjab, he added.

Meanwhile, Mehmood Nawaz, senior vice president of Sindh Abadgar Board, agreed that the procurement was late and slow at the time when harvesting was at its peak.

Read more: Wheat prices set by government invite exploitation, say Sindh farmers

“Despite an increase in the support price, very little benefit has reached to the growers,” said Nawaz. “Wheat harvesting starts from the beginning of March, but the procurement started on 6-7 April. By this time 40% to 50% wheat had gone away from the growers.”

The president said wheat was sold at Rs1,800 to Rs1,900 per 40kg to the middlemen. 

A crop of 4 million tons is expected in Sindh this year

Most of the growers sold wheat at Rs1,800 per 40kg, Rs200 below the support price, and the difference reached Rs7 billion for 1.4 million tons, which is the procurement target of the provincial government.

“No benefit of the crop is being transferred to consumers who purchase wheat flour at Rs70 kg and above. We see that the middleman is encouraged officially, so he gets the benefit. If he sells to the government, he gets benefits. If he sells in the open market, he gets the benefit, as prices in the open market will be increased from Rs2,500 to Rs2,600 per 40kg after harvesting ends,” he maintained.

Overall, a crop of 4 million tons is expected in Sindh this year. If the government procures 1.4 million tons, the remaining 2.6 million tons will be sold in the open market.