RescueRanger
Meme Lord
AS 2023, what the farmers call a disastrous year, wears out, they do not have much hope for 2024 as well. They list expected problems they are expected to face next year, some of them existential in nature: rising cost of production, market cartelisation, profiteering, price crashes, scarcity of seeds, bad and deteriorating governance and agriculture falling out of ruling elite — except of course for lip service.
Until and unless the party coming to power in the February 8 elections declares an agriculture emergency and commits all political, financial and administrative resources to it, the sector would find it hard to survive, let alone thrive, say most of the farmers and experts Dawn spoke to.
Dr Iqrar A Khan, author and contributor to national and provincial agriculture policies, advises the next government to control cartels in commodity markets if it wants the crop sector to perform.
Making his point clear, he said that the government created high hopes for cotton growers when it declared an indicative price of Rs8,500 per maund. It led to a strong revival of crops, and production doubled in a matter of one season. However, as soon as cotton started arriving in the market, the price crashed to Rs6,500 per maund, robbing farmers of their hard-earned money and the government of credibility.
The same thing happened to maize as well: its price dwindled to half of its pre-sowing value. In a production cycle with very high costs, price slides like these leave farmers and farming crippled for years. These crashes now set the context for next year and dim the hopes, Dr Khan predicts.
Comparing the cost of production with the price of commodities, Khalid Khokhar of Pakistan Kissan Ittehad (PKI) wonders how farmers could survive, let alone perform. “For urea alone, the growers paid more than Rs120 billion to black marketers this season alone. Four different urea prices operated in the national market with complete impunity. Which sector in the world can take that kind of hit and endure? We are talking about one input.
“The same is true for all others as well, be it diesel, electricity, water availability, bank markup and farm labour. After these massive expenses, the prices collapsed, leaving most farmers under huge debts. These debts will now be carried over to the next year and set the financial context of the sector for 2024. Can cash-strapped farmers afford the kind of investment needed for crops? Should it take the risk given the current price smashes?” These are the two defining questions for 2024, Khalid Khokhar concludes.
The crisis extends beyond sudden price breakdowns and is now structural, Malik Naeem of Farmers Associates Pakistan (FAP) claims. Farmers are now subjected to double taxation — agri-income tax and fixed tax on acreage. With it has come a 500 per cent increase in abhyanga — water service charge — and all three charges are now part of the government’s revenue scheme.
They would impact the sector very negatively in 2024. With the kind of killing increase in the cost of production, the free fall of prices of commodities and the butchering taxation regime, only the most naïve would expect the sector to stay alive. Forget about performance and prosperity, Malik laments.
Abad Khan, a farmer and a part of FAP, who serves on a few boards of directors of agri-companies as well, thinks that “confusion about sowing” would be the catchword next year. Agriculture does not fit into calendar years; it is all about continuity. Decisions made in 2023 regarding what to sow and what not to sow will define 2024.
“For the last decade or so, maize has anchored agriculture. With its price crashing, each farmer will now have to decide whether to continue with it or not. Punjab’s wheat policy is deeply confusing. Punjab has changed procurement and release prices twice in the last two months, leaving farmers in a financial and policy lurch. The cotton crash has left farmers in a deep muddle about its future. Early potato crop prices have slid after initial better returns, leaving farmers wondering whether they should continue sowing it.
“With farming becoming capital intensive — high input rates, historically high bank markup, record contract rates — in every sense of the word, farmers will have to make highly risky decisions on what to sow and what not,” Mr Khan predicts.
All farmers agree that it does not matter who comes to power next. They have seen them all and experienced their policy preferences as well.
The only silver lining they foresee is the newly created Special Investment Facilitation Council, which aims to bring new investment to Pakistan. If the council owns the sector and makes it one of the preferred areas for investment, as its members say they would, the sector may look up. Left to routine politicians, things would stay as they are, farmers fear.
Full article:
Until and unless the party coming to power in the February 8 elections declares an agriculture emergency and commits all political, financial and administrative resources to it, the sector would find it hard to survive, let alone thrive, say most of the farmers and experts Dawn spoke to.
Dr Iqrar A Khan, author and contributor to national and provincial agriculture policies, advises the next government to control cartels in commodity markets if it wants the crop sector to perform.
Making his point clear, he said that the government created high hopes for cotton growers when it declared an indicative price of Rs8,500 per maund. It led to a strong revival of crops, and production doubled in a matter of one season. However, as soon as cotton started arriving in the market, the price crashed to Rs6,500 per maund, robbing farmers of their hard-earned money and the government of credibility.
The same thing happened to maize as well: its price dwindled to half of its pre-sowing value. In a production cycle with very high costs, price slides like these leave farmers and farming crippled for years. These crashes now set the context for next year and dim the hopes, Dr Khan predicts.
Comparing the cost of production with the price of commodities, Khalid Khokhar of Pakistan Kissan Ittehad (PKI) wonders how farmers could survive, let alone perform. “For urea alone, the growers paid more than Rs120 billion to black marketers this season alone. Four different urea prices operated in the national market with complete impunity. Which sector in the world can take that kind of hit and endure? We are talking about one input.
“The same is true for all others as well, be it diesel, electricity, water availability, bank markup and farm labour. After these massive expenses, the prices collapsed, leaving most farmers under huge debts. These debts will now be carried over to the next year and set the financial context of the sector for 2024. Can cash-strapped farmers afford the kind of investment needed for crops? Should it take the risk given the current price smashes?” These are the two defining questions for 2024, Khalid Khokhar concludes.
The crisis extends beyond sudden price breakdowns and is now structural, Malik Naeem of Farmers Associates Pakistan (FAP) claims. Farmers are now subjected to double taxation — agri-income tax and fixed tax on acreage. With it has come a 500 per cent increase in abhyanga — water service charge — and all three charges are now part of the government’s revenue scheme.
They would impact the sector very negatively in 2024. With the kind of killing increase in the cost of production, the free fall of prices of commodities and the butchering taxation regime, only the most naïve would expect the sector to stay alive. Forget about performance and prosperity, Malik laments.
Abad Khan, a farmer and a part of FAP, who serves on a few boards of directors of agri-companies as well, thinks that “confusion about sowing” would be the catchword next year. Agriculture does not fit into calendar years; it is all about continuity. Decisions made in 2023 regarding what to sow and what not to sow will define 2024.
“For the last decade or so, maize has anchored agriculture. With its price crashing, each farmer will now have to decide whether to continue with it or not. Punjab’s wheat policy is deeply confusing. Punjab has changed procurement and release prices twice in the last two months, leaving farmers in a financial and policy lurch. The cotton crash has left farmers in a deep muddle about its future. Early potato crop prices have slid after initial better returns, leaving farmers wondering whether they should continue sowing it.
“With farming becoming capital intensive — high input rates, historically high bank markup, record contract rates — in every sense of the word, farmers will have to make highly risky decisions on what to sow and what not,” Mr Khan predicts.
All farmers agree that it does not matter who comes to power next. They have seen them all and experienced their policy preferences as well.
The only silver lining they foresee is the newly created Special Investment Facilitation Council, which aims to bring new investment to Pakistan. If the council owns the sector and makes it one of the preferred areas for investment, as its members say they would, the sector may look up. Left to routine politicians, things would stay as they are, farmers fear.
Full article:
Agriculture: Agri hopes pinned on SIFC
Without the council’s focus, farmers fear that the sector may find it hard to survive, much less thrive.
www.dawn.com
