Lower market price has discouraged farmers leading to decline in wheat production

An initial forecast shows that wheat production in Pakistan is expected to decline in the upcoming rabi season due to lower market prices. This was disclosed by officials from the Ministry of National Food Security and Research during a briefing to the Senate Standing Committee, chaired by Syed Masroor Ahsan. At Tuesday’s meeting, the committee also discussed tax recovery issues within the textile sector. 

Officials provided details on the Wheat Board’s structure and function, explaining that it consists of 27 members, including wheat growers, and was created following Senate recommendations. The board’s main roles include ensuring that agricultural inputs for wheat cultivation are available and assessing the production costs of the wheat crop. However, the low wheat prices are expected to lead to reduced production this season, affecting overall yield. 

The committee was informed that the textile sector owes approximately Rs. 3 billion in tax arrears. Of 121 textile firms, 65 filed cases instead of paying the dues; 63 cases were decided in favor of the Pakistan Central Cotton Committee, with two still pending in Peshawar High Court. In 2023-24, the Cotton Commission collected Rs. 293 million in tax. Currently, 184 textile firms are paying the tax, while 157 are unresponsive. 

Read more:  Wheat Production Estimated To Fall Short By 2 Million Tonnes

Aimal Wali Khan inquired about the Pakistan Central Cotton Committee’s (PCCC) purpose and formation, which was established by an act of Parliament and is led by the Federal Minister. The PCCC includes members from the agriculture sector and representatives from cotton-producing provinces. Due to insufficient cess collection details, the committee postponed the discussion. 

The committee also addressed pensions for Pakistan Cotton Standards Institute employees, with Ahsan urging that pensions be provided promptly as recognition for their dedicated service. 

PASSCO’s Managing Director, Sarfaraz Durrani, briefed the committee on PASSCO’s role in maintaining wheat reserves to ensure national food security. PASSCO stabilizes wheat prices by setting a support price and operates through loans from six commercial banks (75% ownership), with the remaining 25% funded by the government. As of now, PASSCO’s receivables amount to Rs. 194.746 million, owed by various food departments, the government, and the Pakistan Army. 

Recently, PASSCO suspended 249 employees, including two senior managers, on corruption charges to enhance its efficiency. The committee also formed a sub-committee to investigate a recent wheat import scandal, led by Senator Aimal Wali Khan. 

 What will be potential impacts of the decline in wheat production in Pakistan?  

The forecasted decline in wheat production in Pakistan for the upcoming rabi season, due to low market prices, could have serious implications for national food security. A reduced wheat yield may lead to higher dependency on imports, impacting foreign exchange reserves and potentially driving up domestic prices.

Additionally, farmers facing lower returns might shift to alternative crops, further decreasing wheat cultivation areas and creating long-term supply issues. These challenges underscore the importance of stabilizing wheat prices and supporting farmers to sustain local production and ensure food security in Pakistan.