Punjab to stop wheat procurement by 2021

11.09.2017

The Punjab government has agreed with the World Bank to withdraw its annual practice of wheat procurement by 2021, reducing the strategic grain reserves to just 1 million metric tons in next four years, it was learnt.

Under the programme of ‘Strengthening Markets for Agriculture and Rural Transformation in Punjab (SMART — PforR)’, the government has also agreed with the lending agency to deregulate prices of milk and meat by that time. According to the official documents, a copy of which also available with The Nation, the Planning and Development Department (P&D) of Punjab government has agreed on 11 Disbursement Linked Indicators (DLIs) with the World Bank under a project titled ‘Strengthening Markets for Agriculture and Rural Transformation in Punjab (SMART — PforR)’ to avail the loan from the international donor.

The annual practice of government to procure wheat through its Food Department, which was aimed at food security in the province along with stability of grain prices to protect the growers, will now be hit badly, as the authorities have decided to procure wheat no longer. The government has also informed the WB that it would notify its plan of stopping procurement of grain in 2019, which would finally be implemented by Rabi 2021.

The government has also assured the WB to increase Abiana rate by 20 percent annually for next five years to avail the loan for the continuation of SMART Project in Punjab in collaboration with the international lender. An official of Punjab Livestock and Dairy Development Board confirmed The Nation that a proposal has been forwarded to Punjab CM Shehbaz Sharif by the World Bank to deregulate prices of milk and meat in the province and let the open market decide the prices of these items. He said that government was already considering to withdraw the announcement of support price of wheat on demand of different circles particularly the flour millers in the province. “In view of present political scenario, the issue is very serious and the PML-N government does not seem to implement this,” the official said requesting anonymity.

As per official documents, under the 11 Disbursement Linked Indicators (DLIs) or conditions placed by the World Bank, the Punjab government has also agreed to improve access to quality farm inputs. In this regard, the government has informed the WB that it has submitted amendment to federal seeds (amendment) act 2015 to the federal government to provide enabling environment for private sector for participation in seed sector, besides e-voucher subsidy for potash fertiliser was also extended to farmers. With a view to revitalise provincial crop and livestock research system, 0.1 of agriculture GDP was allocated to research in FY2016-17 of which 4 percent was allocated to competitive research grants on the demand of WB.

For agriculture research strategy and policy development, the board of directors of the Punjab agriculture research board was reconstituted with the majority of private sectors representatives. The provincial government also allocated 2 percent of agri GDP to research of which 8 percent was channelled through competitive research grants including private sector.

Under the DLI 3 with a view to improving livestock health, the government has claimed to reallocate public animal healthcare budget, in next five years, towards preventive care from curative care. Under the DLI3 (B) to improve livestock breeding, 7000 animals were registered in progeny testing program of Sahiwal cattle in first year, which will be extended to 30,000 in five years. According to the agreement, under DLI4 (A) for deregulation of wheat market, an agricultural policy is under preparation and Punjab government has notified plan to withdraw the wheat procurement program by Rabi 2021 and reduce the strategy grain reserves to 1 million metric tons.

Under the DLI4 (B) for transition to High Value Agriculture (HVA), the government claimed to already allocate 9 percent of agri ADP crops to transition towards to HVA, which would be increased to 20 percent in percent in different phases in four years. Under the DLI5, the government claimed to provide incentives to agriculture SMEs for investment in agri value addition.

World Bank Pakistan Acting Country Director Anthony Cholst, in his letter to P&D Board chairman Jehanzeb Khan, said that a World Bank team visited Lahore from May 15-26, 2017 to carry out a second preparation mission for the Strengthening Markets for Agriculture and Rural Transformation in Punjab. “We would like to thank you for the cooperation and support provided by the government of Punjab to the team during the mission. Building on the agreed Roadmap towards Agriculture and Rural Transformation to be supported by the bank through a Programme for Results (PforR), the objective of the mission was to sharpen the PforR’s programme boundaries and Disbursement Linked Indicators (DLIs), to develop the Results Chain and Results Framework, and further define institutional arrangements.”

He said that the main outputs of the mission included agreements with Punjab government regarding scope and definition of the DLIs, and a Results Chain and Results Framework. The mission also produced a zero draft of the Matching Grants Manual and started working on the Project Appraisal Document (PAD).

“Whereas the mission reported substantial progress to me, they also flagged some concerns regarding access to, and buy-in of the highest decision makers at some departments. In this regard I would like to emphasize the crucial importance of full cooperation and ownership of Punjab government at all levels for the eventual success of SMART Punjab.” He said that the endorsement of the programme made by the chief minister at the Steering Committee meeting on February 8, 2017 needs to be fully translated into sustained strong technical engagement by all concerned departments.

He appreciated the Punjab government for fruitful interactions with various departments and other government organisations involved in SMART Punjab including the Departments of Agriculture, Food, Irrigation, Industry and Commerce & Investment, Livestock, as well as the Punjab Food Authority (PFA), Board of Revenue, Punjab Agriculture Research Board, Punjab Technical Vocational Education Authority (PTVETA) and Punjab Economic Research Institute (PERI). He said the mission also met with selected representatives from the private sector, and with the consultants engaged by the bank for the Financial Management Assessment (FMA) and the Environment and Social Systems Assessment (ESSA).

Anthony said that Punjab government committed to the development of an appropriate communication strategy with technical support from the bank followed by timely implementation. “This strategy should clearly structure communications around the importance of positioning SMART Punjab as a comprehensive programme of which results should be assessed based on entirety, rather than the individual parts,” he added. The bank team suggested the Punjab government to appoint an independent verification agency in order to facilitate possible disbursement by effectiveness based on achieved prior actions.


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