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Storage issues may hit wheat
procurement
By Munawar Hasan
 INADEQUATE
grain storage capacity in the public sector departments can
cost the country greatly as a major chunk of the procured
wheat will be kept in the open or it will be at the mercy of
private warehouses.
The inability of successive governments in procuring extra
wheat resulted in almost no increase in grain storage
capacity in the last many years. The Punjab Food Department
has the maximum storage capacity of about 2.18 million tonne
wheat while the Pakistan Agricultural Storage and Services
Corporation can store only up to 0.8 million tonne. The
available storage capacity of the food department is less
than two million tonne this year due to carry over stock
while Passco surprisingly has no capacity for storing wheat
this year as its warehouses are occupied with about 700,000
tonnes of rice. The Sindh Food Department also has
negligible storage capacity.
However, procurement target of provincial food department
this year is six million tonnes while Passco has been given
the task of buying two million tonnes of wheat. The
procurement target of the Sindh Food Department is 1.2
million tonnes.
It means that almost seven million tonnes or about 80 per
cent of procured wheat will be stored in the open godowns or
in the rented warehouses.
If compared with our regional rival, India has taken
concrete measures for enhancing grain storage capacity over
the years. In India, the main agencies, which store the
surplus grain, include the Food Corporation of India with
storing capacity of 7.7 million tonnes, the Central
Warehousing Corporation having capacity of 2 million tonnes,
the State Warehousing Corporation with storage capacity of
24 million tonnes, grain marketing cooperatives with storage
capacity of 4.5 million tonnes and some state governments
having storage capacity of 1.9 million tonnes.
It is a basic principle of permanent grain storage that
greater wheat holding capacity means smooth availability of
commodity round the year, which makes price of grain stable.
It also gives a signal to growers that public sector
departments will buy their produce with ease as they have
ample arrangements in this regard.
However in Pakistan, due to a very limited storage capacity,
the Punjab Food Department, the biggest wheat buyer in the
country, is facing an uphill task to store abundant grains
in the present season. In order to reduce the burden of
procurement campaign, the high-ups of the department tried
to involve flourmills in buying and storage of wheat but the
proposal could not be materialised. Flourmills are in no
mood to share the government’s burden due to a variety of
reasons. As a last resort, the food department is trying to
get private godowns on rent in the province. But low
official rate of rent has emerged as a major obstacle in
this direction. An official of the food department informed
The News that no one was ready to provide warehouse at a
meagre rent of Rs1.50 per sq foot per month.
In order to resolve the issue, the provincial food
department has written a letter to all the DCOs of the
province on Sunday to establish the Rent Assessment
Committees to fix rents of warehouses on a site-to—site
basis. The revised rent can be up to Rs 3.50 per sq ft. The
step will hopefully ensure availability of much required
storage capacity for wheat.
But it is not a permanent solution to the problem.
Federal and provincial governments will have to
increase their storage capacity on a permanent
basis.
Punjab Chief Minister Mian Shahbaz Sharif has made
the entire machinery of his government run from
pillar to post to buy wheat at a support price of
Rs950 per 40kg. The effort has been widely commended
by various circles as farmers are getting due share
of their produce.
Nevertheless, this entire exercise is a short-term
solution to farmers’ marketing-related problems
because it only aims at stabilising wheat price in
one season. Several medium and long-term steps are
required to ensure supporting price for wheat in the
years to come. Besides making arrangements for
funds, the foremost importance should be given to
increase wheat storage capacity in the public
sector.
“If you have ample storage capacity, let’s say
according to the procurement target, you will enter
the market with confidence and will buy
aggressively,” said one expert.
One of the main reasons of slow wheat buying by the
public sector institutions is lack of proper storage
capacity. If public sector entities have modern
silos for storage, the waste of grains will also be
minimal and farmers will not have to stand in queues
at procurement centres.
On the other hand, will you imagine that a modern
silo having capacity of 30,000 tonnes was completed
in Islamabad a couple of years back but it is not
being used by the food department? The then
secretary food had given go ahead to a private
company to complete state-of-the-art silo after
carrying out proper tender process. Moreover,
despite completion of the project, millions of
rupees are yet to be paid to the company concerned
in this regard.
Sources claimed that local staff of the food
department were not happy with the construction of
such silos as manipulation with stored grains would
not be possible for them.
It is pertinent to mention here that construction of
such modern silos will also significantly reduce
dependence on gunny bags because grains can be
stored in bulk at such facilities. The fumigation of
grain can also be carried out with a great ease in
them.
With a view to increasing storage capacity of grains
in the country, the federal government will have to
give a go ahead to Passco’s PC-I for construction of
silos having capacity of 0.5 million tonnes. The
Baboos of the federal government have also sit on
another proposal of Passo to build godowns with
storage capacity of 1.1 million tonnes. Both of
these proposals were submitted to the federal
government several years back but to no avail.
Similar steps should also be taken by food
departments of Punjab and Sindh provinces.
When contacted, Punjab Food Secretary Irfan Elahi
said steps were being taken to utilise the available
storage capacity. He said the silo constructed in
Islamabad would be utilised this year, adding that a
significant amount of wheat would be stored in the
open which would be properly covered by tarpaulins
and polythene sheets. He said further steps were
being taken to increase the storage capacity.
Courtesy:
The NEWS
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Pakissan.com;
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