The federal government wants the IMF to reconsider its decision, which has been implemented, to end the minimum support price system for wheat. The recent abolition for sugarcane is to be allowed to remain. There is an IMF review team arriving at the end of the month for the second semi-annual the $7 billion Extended Fund Facility, and this topic could be fruitfully raised with it. This was disclosed by federal Food Security Minister Rana Tanveer Hussain to the National Assembly’s Standing Committee on National Food Security and Research during testimony on Tuesday.
The MSP system entailed the government setting a price at which it promised to buy wheat and announcing it before the sowing season, so that farmers could know how much they would br paid. Wheat buyers would have to pay the farmers more if they wished to buy the crop at once. Farmers would know that the government would buy at the minimum price. The government tried to apply this mechanism to sugarcane, with the big difference being that sugarcane does not store well. It should be remembered that wheat is a staple in a way that sugar is not. It has been the policy of even pre-Partition governments to keep wheat and sugar prices stable, with World War II seeing a rationing system that lasted into the Zia era, when wheat autarky was achieved, and rationing was abolished. That autarky is now under threat, because prices are determined by the market, and wheat is both exported, and then imported. Similar is the case with sugar, where first $450 million was exported, but $150 million worth is being imported. It may seem the country is gaining, but there has also been a hefty increase in the price of sugar.
That the government is beholden to the IMF for its decisions, and the IMF propoumds the spread of market-based solutions is known, but the government should learn from the example over the border, where the attempt to abolish support prices led to massive farmers’ protests, including a blockade of New Delhi. It should be remembered that abolising support prices does not benefit farmers, but corporate interests. The government’s promoting corporate farming, as was tried in India, takes on a whole new meaning, but it is to be hoped that the support price will be back by the time the government announces the new wheat policy early next month.
