Wheat losing edge over cotton, cane crops
THE wheat crop has started losing comparative price advantage vis-Ã -vis sugarcane and cotton and is expected to lose a chunk this season. As a first sign, sowing is falling behind the schedule. By mid-December, one month after the deadline, the province is still struggling with its target of 16.89 million acres, being short of one million acres.
As per official claims, farmers are still sowing the crop and might achieve the target by the first week of January. But the sharp decline in temperature, falling close to zero degrees Celsius in most parts of the province, will make germination of the seed almost impossible for new sowing from here on. The farmers would hardly take the risk.
The pattern of sowing reflects how wheat is losing the competitive edge against cane and cotton. Over 90 per cent of sowing deficit has come from the traditional cotton belt areas falling between Multan and Rahimyar Khan. The rest has come from the cane area. It is largely because of lucrative cotton prices, which touched whopping Rs10,000 per maund before dropping by 10 per cent to hover over Rs9,000 per maund. The cotton prices are riding high because of drop in international and domestic pro- duction and export curbs imposed by big players like India. Of late, India has emerged as a big cotton exporter. Every time it squeezes supplies, huge demand from China drives the price up.
International cotton prices have risen steeply since the beginning of this season. Average price over first four months of the season remained 120 cents per pound, almost twice as high as the average over the corresponding period last year.
In Pakistan, where cotton production fell around three million bales short of its milling requirement, the prices spike was even sharp.
The farmers in the cotton belt are thus waiting for the last possible picking, rather than vacating the fields for wheat. They are doing so with a justification that if they can squeeze two maunds of cotton, they would get over Rs18,000 for just waiting instead of sowing wheat.
The cane prices have shot up because of its current shortage. The official indicative price stands irrelevant. The farmers are demanding as high as Rs300 per maund, if the millers are to be believed, and are keeping the supplies squeezed. The millers are only themselves to be blamed for the situation.
They have convinced farmers and consumers during the last few years that there was no link between the cane cost and sugar price. No matter at what price farmers provide cane, the millers would set the sugar price and multiply their profits.
Each year for the last few years, the farmers have repented selling cane at cheaper rate when the millers subsequently made billions of rupees by manipulating the sugar market.
This year, the farmers want their pound of flesh. They have increased the price to whatever limit they possibly can bargain for, and also refused to harvest crop till they get price of their choice. They are even risking next sowing to ensure maximum profits on this season's cane. In the struggle, wheat sowing has become causality.
Wheat loosing its financial sheen reflects the fact that market forces are now determining the cropping pattern. But, one should not lose the context in which these changes are taking place.
Unfortunately, they are happening for wrong reasons. One of the reasons is the cartelization of agriculture trade, where traders and manufacturers are making billions of rupees at the cost of farmers and consumers. The farmers are responding to the phenomenon by forming their own cartels as proven by cane supply and price. Moreover, the traditional agriculture set-up is collapsing in Punjab and farmers are trying to fill the gap by taking charge of the cropping pattern.
The provincial government needs to realise that it cannot allow cartelization of agriculture and its trade. It first ignored the sugar millers who fleeced the common man and is now allowing farmers to form cartels. It needs to act now to check these undesirable trends from striking deeper roots in the market and making corrections all the more difficult. Coordination between the provincial and district governments also needs to be strengthened to enforce centralised policy guidelines for development of agriculture. The employees, working under the district administrative set-up, have ceased to be professionals and become a "work force at the disposal of the DCOs concerned."