Lahore : The Punjab government’s new plan to buy wheat through procurement companies has literally turned into a trap for the growers who are being forced to sell grain to the procurement companies at much lower rates than the open market. Since new estimates indicate much less production than the official projections, the grain is becoming dear in the open market on day-to-day basis. As of May 6, the private sector is buying wheat from the growers directly for Rs 3800 against official procurement rates of Rs 3500 per 40 kg. Seeing higher rates of grain in the open market, the Punjab government has launched crackdown against those flour mills which are buying wheat from the growers directly at comparatively better price.
Industry sources told NEWSMAN that the Punjab Food Department raided at least at three flour mills in Lahore on May 5 and took their stocks purchased from the growers directly in custody.
“The mills which are not in the good books of top guns in the Punjab are primary target of the Punjab Food Department for raids and confiscation of stocks procured from the growers directly’ Said industry source requesting anonymity for obvious reasons. The source claimed that the Punjab government’s plan of buying wheat through the selected procurement companies is aimed at providing an opportunity to a group of powerful individuals to make easy money by using the government machinery where and when needed. The procurement companies mostly owned by the millers having links with the ruling party in the Punjab are being provided the police and provincial Food Department to raid on the mills which are buying wheat directly from the growers at higher price than the official rates. The procurement companies will buy wheat from the growers at official rates of Rs 3500 per 40 kg, stock the grain in the government godowns and later sell the same grain to the provincial Food Department at Rs 3800 per 40 kg in three months time. The owners of the procurement companies are so dear to the Punjab government that it will pay 70 percent interest while the procurement companies will pay only 30 percent for any commercial loan required for procurement of wheat.
The entire scheme of buying wheat through designated procurement companies is meant to facilitate a group close to top Punjab government functionaries to make money. The designated wheat procurement companies are so dear to the Punjab top decision-makers that Lahore Taj will pay 70 percent of bank interest from its kitty. The Punjab government had not procured a single kg of wheat last year and it cost roughly Rs 1000 billion to the farming community. This year the Punjab government has brought a concept of the procurement companies to deprive the growers from selling the produce at competitive rates. One may argue that the procurement companies have been brought in to stablise the market and ensure that the growers least get officially announced rates for their grain. The use of force to stop the mills from buying wheat from the open market at higher price negate these arguments. The market sentiments always play on the concept of competition. The growers can get good price for their produce if more than one player like the past remain active throughout the procurement drive , but if intentions are to facilitate some relatives or any like-minded group to make money through shady procurement scheme then only God can save the growers.
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