The federal finance ministry has imposed a 20 percent regulatory duty on import of wheat for the current crop season, apparently to support domestic producers and discourage wheat import.
Pakistan is one of the biggest wheat producing country in the world and at one point of time it produced wheat more than the entire African continent and even Russia. But unfortunately, the country could not keep up the rally thanks to faulty government policies and administrative failure which not only caused shortage of this vital food item in the country, but also great financial losses to the wheat producers. Ironically,when common man was seen standing in lines to get a bag of wheat from fair price shops across the country, the bag was openly available from shops in Tashkent at a nominal price.
Still the government has allowed the import of wheat to discourage hoarders,but certain importers, to draw maximum benefits from this policy, resorted to wholesale wheat import this summer. The large scale imports disturbed the local price mechanism for this commodity, putting the government in a quandary as low price only brought relief for common man but not for the farmers.
According to experts, high rates of wheat will encourage farmers to grow more wheat which will pave the way for Pakistan to again enter the wheat exporters club.
On another note, Finance Minister Ishaq Dar has announced an 8.4 percent increase in support price of wheat and fixed it at Rs1,300 per 40 kilograms for the next crop. The move will definitely bring about a sense of satisfaction among the farmers, but will push wheat prices up in the domestic market.
The farmers were expecting fixed price of wheat at Rs 1.500 per 40 kilogrammes, however, there are still apprehensions that the decision would increase overall inflation in the country. In Pakistan, tough decision seldom work as the implementation of the policies needs capacity building of the government machinery. The only panacea for this situation is to push farmers to grow more wheat and the government should help them to turn it into a value added commodity.