The Plight of Punjab’s Farmers amid Crashing Wheat Prices

Punjab, the agricultural heartland of Pakistan, is currently experiencing a deep crisis as wheat prices continue their precipitous decline, endangering the livelihoods of countless smallholder farmers. The crisis began when the Punjab government significantly reduced its wheat procurement target, citing a surplus stock of 2.3 million tonnes already available in storage facilities. This sparked an uproar among farmers as wheat prices declined to RS 3,000 per 40kg, considerably lower than the Minimum Support Price (MSP) of RS 3,900 per 40kg set by the government for this year. In opposition, major unions, including the Kissan Ittehad, urged the farmers to retain their produce instead of selling it at throwaway prices. Therefore, unionised farmers carried out rallies and sit-in protests across the province, demanding compensation for their losses.

Farmer’s protests in Punjab is a major crisis with significant ramifications for socio-economic security and political stability. Given that framers solely depend on loans and credit to finance their operations, the accumulating debt has become burdensome for them, causing financial stress. It will also impact their ability to invest in the next crop cycle, particularly affecting crops like cotton that follow wheat in the agricultural calendar. Additionally, the disparity between support and market price of wheat could potentially disrupt the supply chain, leading to inefficiencies and shortages in other parts of countries where wheat might be sold at a higher price. In terms of political impact, farmer’s unrest and protests could transform into a broader movement, challenging domestic stability as well as diminishing political support for the ruling party.

The genesis of the wheat debacle lies in government decisions entangled in bureaucratic silos. Generally, the government buys 20 percent of the total wheat produced by local farmers at a fixed rate. This involvement by the government not only ascertains stability of price but also prevents hoarding. However, this year, the caretaker government proclaimed that it would only procure wheat amounting to 2 million tonnes from the local framers, representing a 50 percent decrease in procurement targets. The situation was further compounded by the policy to import more than 3.4 million tonnes of wheat prior to the bumper harvest.

Additionally, as opposed to the conventional way of written application to procure gunny bags to transfer wheat, the government changed the application procedure for selling wheat to the food department by launching Bardana mobile app. This change conveniently ignored the fact that rural farmers are not teach-savvy. Yet, 400,000 people applied, but only six bags were issued per acre, that too only to those farmers that owned up to six acres of land. The Farmer union deemed such a decision as mala fide, asserting that smallholder farmers rarely sell their produce to the government.

While the profiteering of middlemen, known as “arthis” and “beoparis” has increased the struggles of small and mid-sized farmers, large-scale domestic and international agribusiness companies have increasingly assumed a stronghold in Pakistan’s agricultural markets. These firms aim to monopolise the supply of inputs and machinery, transporting and storing produce, and commodity distribution.

Furthermore, revelations regarding the PASSCO highlight troubling trends. For example, a recent report revealed that the organisation purportedly allocated 2,000 gunny bags to unidentified individuals and falsely documented them as issued to the Kissan Board. This lack of accountability and transparency not only erodes trust in the institution but also perpetuates a cycle whereby middlemen and traders benefit at the expense of local farmers. While supporting private traders may offer certain advantages, it can exacerbate issues, such as market manipulation, unjust pricing, and the exclusion of smallholders from the procurement process. Moreover, the suspension of the Managing Director and General Manager Procurement of PASSCO depicts disconnect between government directives and PASSCO operational execution, highlighting the urgent need for comprehensive reforms and a streaming process to mitigate supply chain disruption.

All in all, akin to several other perennial problems in Pakistan, the current crises also stem from the absence of prudent policymaking and inadequate governance. However, to minimise economic insecurity and social upheaval, a multifaceted approach is required. First, the government must promote value-added processing industries and processing units near agricultural hubs to reduce post-harvest losses and generate additional revenue streams for farmers. Second, to reduce vulnerability associated with price volatility and input costs, the government must expand access to affordable credits and insurance schemes to smallholder farmers. Third, crop diversification is crucial to reduce dependence on wheat cultivation and reduce susceptibility to market fluctuations. By and large, farmers are the backbone of our nation; the state must prioritise their well-being and address the challenges they face.