The increase in domestic farm output over the past four years may be attributed to better weather conditions, high international commodity prices as well as better knowledge of farmers. Information collected from multiple sources including farmer representatives, federal and provincial government departments, showed that earnings of the rural population with landholdings of 13 acres and above had substantially increased because of increased market price of important crops such as wheat, sugarcane, paddy, cotton, maize, pulses, vegetables and livestock.
Contrary to general perception, support price played a lesser role than market price in spreading wealth in rural farms of 13 acres and above, sources said. They said that during the past decade, income of farmers, especially with landholdings of 13 acres or above, doubled by comparison with the decade of 1990s.
According to a senior official of the Planning Commission, prices of important commodities such as wheat, cotton, sugarcane and rice had increased considerably in the past four years. The increase in international commodity prices encouraged farming communities to spend more on increasing their crop production.
“If we considered increase in wheat support price as the only contributing factor to increased farm wealth, we would be wrong, because the support prices increased by 61 percent against a three times increase of other input costs such as urea over the past four years,” the official added.
Prices of other inputs, including diesel, machinery and transportation over the same period also significantly increased. For instance, diesel was available at Rs 38 per litre in 2008, which is currently being sold at Rs 113 per litre. According to official data, the baseline price of sugarcane in Punjab-Khyber Pakhtunkhwa and Sindh-Balochistan increased by 87 and 90 percent, respectively, over the same period.
In 2008, the government decided to increase the wheat support price from Rs 650 per 40 kg to Rs 950 because of which the commodity’s output significantly increased. But at the same time cost of different farm inputs also registered a considerable hike: price of urea went up from Rs 650 per 50 kg bag to Rs 1,100 per 50kg bag in 2009-10. At present, it stands at Rs 1,720 per 50kg bag. Between 2008 and 2011, the wheat support price remained at Rs 950 per 40kg, while in 2011-2012, the government increased it to Rs 1,050 per 40kg.
In 2008-09, the baseline price of sugarcane in Punjab and Khyber-Pakhtunkhwa was Rs 80 per maund, in 2009-2010 it was Rs 100, in 2010-2011 it was Rs 125 and in 2011-2012 it was fixed at Rs 150 per maund. The baseline price of sugarcane in Sindh and Balochistan was Rs 81 per maund in 2008-09, Rs 102 in 2009-2010, Rs 125 in 2010-2011 and Rs 154 in 2011-2012, an official at the Agriculture Policy Institute (API) told Business Recorder on Tuesday.
Source said that the government had announced Rs 1,465 baseline price for cotton seed in 2008-2009 and the baseline price remained unchanged till 2011-2012. The official said that after trade liberalisation under WTO, regime transition in the price policy system has taken place during the last decade. After the transition in the policy, the support price is only announced for wheat crop to protect the country’s food security.
Source said that in case of cotton seed and paddy crops major role of marketing is played by the private sector. The government mainly regulates the marketing system. “Only in case of emergency, the government announces an intervention price as an alternate buyer to cushion the market at a reasonable level,” he said. He said that for sugarcane the provinces announce indicative prices, which are implemented through sugar-mills operating in the private sector.
Official said that in the past the support price policy programme covered wheat, sugarcane, cotton, rice, gram, onion, potatoes, sunflower, soyabean and canola. In May 2001 the government decided to continue the support price policy only for wheat, sugarcane, rice and cotton crops. In 2002, it was decided that the support price policy of wheat, rice paddy and seed cotton will be determined by the federal government while provincial governments will fix the sugarcane support price.
The official said that the country produced 24.0329 million ton of wheat in 2008-09 against a total sowing area of 22.353 million acres. In 2009-2010, total wheat output was 23.311 million tons while its cultivation area was over 22.565 million acres. In 2010-2011, total yield of wheat was 22 million tons and it was cultivated over 25.214 million acres and in 2011-2012, the country produced 23.34 million tons of wheat while the crop’s total sowing area was 21.434 million acres.
Similarly, total sugarcane sowing area in 2008-09 was 25.44 million acres, 2.34 million acres in 2009-2010, 2.44 million acres in 2010-2011. In 2011-2012, the total sowing area of sugarcane was 26.13 million acres. He said that total sowing area of cotton in 2008-2009 was 2.82 million hectares and total production was 11.82 million bales, in 2009-2010 cotton was cultivated on over 3.11 million hectares with production of 12.92 million bales, in 2010-2011 total sowing area of cotton was 2.69 million hectares and total production was 11.46 million bales. In 2011-2012 total cotton was cultivated on over 2.82 million hectares and total production was 12.63 million bales.