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  • Modern infrastructure and reformed policies can transform bumper crops into sustainable prosperity

Pakistan has produced bumper crops of rice, maize and wheat so far in 2024, but will not reap benefits because of bad policies, inadequate storage facilities and absence of value addition. Not only the farmers have lost the confidence because of plunging of prices, but it is also feared that over the next couple of years the country may see drastic reduction in production.

Many analysts are jubilant that Pakistan succeeded in exporting large quantity of rice, but it was mainly because the Indian government-imposed ban on export of rice. Pakistan may have succeeded in exporting rice to low-end market, but found it difficult to cater to the needs of high-end markets due to certain issues.

In case of maize the increase in production was exponential, to 10.6 million tonnes from 1.6 million tonnes. Still the benefits were minuscule because bulk of the quantity was exported. It is regrettable that the local business community hardly used any quantity for extraction of oil or any other product.

The most disappointing is the story of bumper wheat crop. As against the support price of around Rs4,000 per 40 kg, farmers could get from Rs2,400 to RsR3,200 per 40 kg. Some of the likely repercussions are: farmers didn’t have enough money to buy inputs for the next crop, wheat has been bought by ‘undesirable’ elements that will smuggle it to the neighbouring countries and over the next couple of years the country will face the shortage of staple food grain.

Cotton picking has started in Sindh and cotton price has already declined substantially. Normally, prices of cotton decline with the arrival of new crop, but this year due to ill-timed import the prices have declined more sharply. The most regrettable point is that the textile industry is exporting raw cotton, yarn and un-processed cloth, rather than exporting value-added products.

Analysts are of the view that the country doesn’t have adequate and modern storage facilities. As a result, up to 20% of food cereals goes stale every year. It is feared that almost one-fourth of the wheat produced this year will be rendered unfit for human consumption.

This leads the analysts to the conclusion that high quality/modern warehouses should be constructed on war-footings in Pakistan. Ideally, grain storage silos should be constructed for the storage of wheat, rice and maize. Along with these, flat-bed warehouses should also be built for the storage of cotton and cotton seeds.

It would not be out of context to say that the provincial government of Punjab is playing a very active role, whereas the provincial government of Sindh is far behind. It lacks pragmatic thinking as well as capacity to take timely decisions.

This point can be established by the fact that wheat was not included in electronic warehouse receipt financing regime till lately, but this year it has been included in the regime and first receipt has been issued. It is believed that more warehouses are being accredited.

This is also to bring to the notice of the central bank that the electronic warehouse receipts can’t be issued unless there are trustworthy warehouses are present in the country. The central bank must hold awareness sessions about the warehouse financing regime.

It would also not be out of context to bring it to the notice of the central bank as well as other financial institutions that Pakistan grossly lack refrigerated warehouses and transportation system. It is on record that up to 40% of fruits goes stale every year.

Analysts are pf the view that construction of modern and efficient warehouses could yield immediate benefits: improve farmers’ income and country’s exports. This would enable movement of people above the poverty line.

Achieving food security is a must for the country. However, this objective just can’t be achieved without ensuring construction of modern storage facilities.