Beating farmers isn’t going to solve the wheat crisis
The brutal police crackdown on farmers demonstrating for a fair wheat support price has led to the death of Malik Ashfaq Langrial. He was one of the farmers leading the demonstration against the government. The government was unwilling to budge on the issue, and the police under its orders relentlessly tear-gassed, water-cannoned and beat the peaceful protestors, injuring many and ultimately causing the demise of Mr. Langrial. The demonstrators allege that the police mixed in some harmful chemicals into the water being shot at them. And, there is a video circulating on social media that seems to show police officers advising each other to mix chemicals into the water before firing the cannons. All in all an extremely cruel and unnecessarily forceful response against farmers rightfully demanding support from the government. Perhaps the government’s extreme response comes as a result of their inability to control the economic situation and their subsequent anxiety over the rising inflation. But, beating farmers isn’t going to solve the wheat crisis or cull inflation. The farmers have legitimate grievances that deserve to be addressed.
This standoff between the government and the farmers stems from the wheat support price set by the government. This price sets the floor for next season’s crop—which is being planted right now—and it has been announced to be Rs. 1,600 per 40 KG of wheat. This is a 14.3% increase from the price that the previous wheat crop was picked up at, which was Rs.1,400. However, the farmers state that they require the price to be set at Rs. 2,000 if they are to break even when the next season’s crop matures. Currently wheat is trading at Rs. 2,200 — Rs. 2,400 in the open market, due to the wheat shortage. The primary reason for the farmer’s demanding a revised minimum support price is that cost of their inputs has gone up significantly. Inputs ranging from fertiliser to electricity have all increased. The Food Ministry has estimated that the cost of production of next season’s cost will be approximately Rs. 1,587 per 40 KG. With the minimum price set at Rs. 1,600 this would leave the farmers with only Rs. 13 in profit per maund (40 KG). With an average yield of 28 maunds per acre so this adds up to a measly Rs. 5,600 in profit per acre. Given how dismal the situation is looking many farmers are opting to eschew wheat and plant fodder and maize instead. Fodder can normally sell for anywhere between Rs. 2,000 — Rs. 4,000, depending on its quantity in the market.
The provincial governments and the federal government have been unable to agree on a uniform wheat support price. The provinces recommended the following prices per maund: Punjab recommended a price of Rs. 1,650, Sindh recommended Rs. 2,000, KPK recommended Rs. 1,880 and Baluchistan recommended Rs. 1,700. The federal government seems to want to stick to the Rs. 1,600 — Rs. 1,700 price bracket. But Sindh is unwilling to compromise, and staunchly in favour of granting Rs. 2,000 per maund . The logic behind this is likely that they want to appease their rural supporters and they don’t want a shortage in the province next season and be forced to import wheat, which is already proving to be incredibly expensive. The wheat imported from Ukraine is costing Rs. 5,000 per maund, in contrast local farmers are only asking for 40 % of that. The government has its own reason for not wanting to pay more than Rs. 1,600 per maund and it is that they don’t want the flour mill owners to pass on this increased down the line to the consumer thereby resulting in a spike in the price of flour. Any further signs of food inflation could prove to be disastrous for the government as it only provides more ammunition to an opposition bent on overthrowing them. However, the farmers too need to earn enough to support themselves and their families thus they should not be made to bear the burden of this government’s economic mishandling. The farmers are actually ready to plant wheat at a guaranteed minimum support price of Rs. 1,600 if the government can bring down the cost of their inputs. In return for certain subsidies they can provide wheat at the government’s price. Whatever, the government intends to do it must do quickly as the wheat planting season ends by mid-November. If the farmers have no incentive to grow wheat by that time then they will plant other more profitable crops and there may well be another wheat shortage next year.