Sunday, 14 December 2014

Paying the price for rice

Nasir Mahmood, a farmer from Aziz Chak, a village in Gujranwala district, cultivated basmati rice crop on 20 acres of land this year. Heavy floods swept away his crop on 15 acres in September while the rest was flattened by severe hail and thunderstorm in October.
“Last year, I cultivated course and hybrid varieties on 15 acre while Basmati on only five acres. I got good rate for Basmati crop last year so I shifted to it this year,” he tells TNS.
He could harvest crop from five acres only this year — around 20 maund (a maund is equal to 40 kg) per acre. Nature’s role apart, market forces too have a share in aggravating his situation.
The rate of basmati crop which was between Rs 2300-2600 per maund last year dropped to between Rs1000-1500 per maund this year. “I received Rs1150 per maund which means I earned around Rs23,000 per acre,” he says, adding that a farmer spends at least Rs25,000 on one acre of basmati rice crop — (Rs5000-7000 on the preparation of the field, Rs3000 on crop transplant, Rs5000-7000 on fertilisers, Rs2500-3000 on pesticides, Rs5000-7000 on diesel to run tubewell to irrigate the crop, Rs3500 on harvesting the crop and Rs1000-1500 to transport the crop to the market.)
“I have not calculated the commission of three to five rupees per 100 rupees charged by commission agent on the total sum. The labourers at the market also charge half kg of paddy per 40 kg from the farmer. So, rate of Rs1150 per maund literally means that I have got around Rs1100 while the rest went to the pocket of the commission agent,” he says, lamenting that he has already landed in a debt trap. “Farmers borrow money from commission agents to cultivate crops. I borrowed Rs300,000 this year but could only manage to send him produce worth Rs80,000. I have no money to cultivate wheat crop. It will take years to get out of the situation. I have not received anything from the government yet,” says Mehmood.
Nasir Mehmood is only one among hundreds of thousands of basmati rice growers in the Punjab who are facing the worst year for the crop. Basmati rice crop is labour intensive; takes more time to mature but has low yield — almost half, compared to hybrid and course varieties which take less time to mature.
This year basmati was grown on over 2.3 million acres in Punjab. Over 0.35 million acres of standing crop was damaged due to floods in basmati growing areas in the province. The average yield of basmati in Punjab is 30 maund per acre. Fall in price by Rs1000 per maund means potential loss of Rs30,000 per acre to the farmers. This translates into Rs60 billion loss to the basmati rice growers in the province — a huge loss to the rural economy of central Punjab where basmati is the major cash crop.
The federal government has announced a relief package of Rs10 billion for basmati farmers. They will get Rs5000 per acre.
This year paddy was cultivated on 4.7 million acres in the Punjab — 0.2 million more than what the government was targeting. “We had set a target of 3.4 million tonnes of rice production this year but we have already achieved the target. This year round 70 per cent farmers cultivated basmati,” Dr Anjum Ali, Director General Agriculture Extension Services of Punjab, tells TNS, saying that course and hybrid varieties fetch better rates. “The problem started when basmati came into market in November. In Pakistan, around 40 per cent of the rice is used in domestic market while the rest is exported. The export market was already exhausted,” he says.
Pakistan produces around two million tonnes of basmati rice every year, half of which is available to export. In 2010-11, Pakistan and India exported almost same quantity of rice — 1.13 million tonnes. Since then the exports started dropping for a number of reasons. The country in this season has already been holding a carryover of 600,000 tonnes and fresh crop of basmati of 1.9 million tonnes has arrived. Big exporters have not shown urgency to buy crop while small millers and dealers are already exhausted because of the situation.
The government has also failed to play its role and all these factors create a major problem for the basmati rice growers who have no option available but to sell their produce at a throwaway price.
“Basmati growers lack storage facilities. Mill owners and middlemen are deliberately delaying the buying to pressurise the paddy growers to sell their crop at throwaway prices. The government has left us at the mercy of mafia. Free economy market is not unregulated,” says Hamid Malhi, President of Basmati Rice Growers Association.
50 per cent reduction in the basmati crop rate is because of international market but 50 per cent decrease is because of cartelisation of big exporters of rice. “The harvesting of the crop started in November but big exporters started buying it in December. The area under cultivation of Basmati was 10 per cent more this year than last year but there is no increase in the yield.” He says that his association would advise growers not to cultivate basmati but course and hybrid varieties of rice.
“India has been able to increase its basmati export from 1.2 million tonnes in 2011-12 to 4.2 million tonnes in 2013-14.” India exports over 1.1 million tonnes of basmati rice only to Iran every year. “It should be cost effective for Iran to import rice from Pakistan but our exporters and government failed to tap the opportunity.”

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