M. H. Panhwar
Farmers in general but Sindhi
farmers and Lower Punjab in particular are being systematically reduced and
asphyxiated to penury and death by the manipulation of the world prices by the
Eight Developed Industrial Nations (G-8), and by the hypocrisy and selfishness
of the agricultural policies of the Government of Pakistan entirely based on the
interests of Industry. The entire Rural Poverty in Lower Punjab and in Sindh has
been artificially created. The responsibility squarely lies on the Federal
Government and its price control policy.
At the time of independence in
1947, agriculture was the dominating sector, contributing 53% of Gross Domestic
Product (GDP). In 1987, 40 years after formation of Pakistan, it contributed
only 26% of GDP, still providing employment to more than 50% of country’s total
labor force. Agriculture and agro-based exports account for 80% country’s total
export earnings. Almost 70% of country’s population is confined to rural areas.
The following figures speak for themselves:
- If more than 50% contribute
75% of GDP, it in itself shows that the ratio of rural to urban income is
26/50: 74/50 or 1: 2.8 or say 1: 3.
- This ratio is also confirmed
by the wage rates. The farm labor gets Rs.1000 per month with no other
benefits, where as a city worker gets minimum of Rs.1, 800 plus medical
benefit (Rs.800-900), plus leave fare allowance, totaling to Rs.2, 800 –
3,000. The wage ratio of rural to urban laborer therefore comes to 600-700:
1800-2000 i.e. 1: 2.85 to 1: 3.
The National Agriculture
Commission 1988 is forced to admit the following facts:
- Even though the importance
of agriculture has long been recognized it has never been regarded as leading
- Agriculture sector has shown
great prosperity to modernize, despite serious policy and institutional
constrains (caused by Government). (p.xxi).
- Most government and
institutional effort has been directed towards major crops (wheat, rice and
cotton) and there has been neglect of majority of so called minor crops.
“Minor” has unfortunately been confused with unimportance. (The minor crops
are categorized as fruits, vegetables, nuts and industrial crops, which pay
the highest returns per acre and some of them, even pay 10 times as much, as
wheat and rice on the same acreage.)
- In the early years 1947-1960
the agriculture sector was discriminated against and initial development
efforts were directed entirely towards industry (p.2).
- During first plan period
(1955-60) some attention was finally directed towards agrarian economy,
although it was not enough. (p.3).
- 1970-77 were learn years and
main thrust of annual development programs and efforts were directed towards
institutional frame work and structure of agriculture (land reforms,
agricultural loans from banks and etc).
- 1977-1986 were years of
The Commission has suppressed
the fact that 1977-1986 were worst years for agriculture. The present writer has
verified prices of wheat, year after year since 1950, covering a period of 40
years and converted the prices to the farmers for 40 kg of wheat to 1950 prices.
The following are the conclusions:
- Prices came down from 100%
in 1950 to 41% in 1963-64, when Ayub Government found that people were no
longer interested in growing wheat in spite of mobilizing Deputy Commissioners
and putting agricultural extension officers under their command, the price of
wheat was increased from about 47% to 60.2% of 1950 value.
- The prices again fell down
to 50.2% in 1967-68 when fearing rural un-rest, (cities were already
agitating) they were increased to 72% of 1950 value, during the last year of
- They came down to 53% of
1950 value, in 1972-73, when Mr. Bhutto’s Government in 1973-74 raised them to
65% of 1950 value and in the next year (74-75) to 106.5% of 1950 value.
- There was urban agitation
against Bhutto’s Government and they raised a bogy of “Mahangai” or dearness,
which threatened the government and which no longer dared to raise prices
during next 2 years of their rule.
- The prices as prevalent at
the end of Bhutto’s regime were 88.7% of 1950 prices.
- Since then the prices have
fallen down and in 1988-89 they were 42.39% of 1950 prices. This is what the
Agricultural Commission has convincingly suppressed calling it “Revival
- By raising price of wheat
from Rs.85 to Rs.97 by Benazir’s Government of 1988-1990, the in 1993 prices
stood at 45.18% of 1950 prices. Even at Rs.160 per 40 kg prices are only 42%
of 1950 prices.
- Incidentally International
prices of wheat were Rs.220 per 40 kg in the year 1989-90 and 1993 are about
Rs.330 the Benazir’s Government was internally so weak, that they could not
raise the prices.
- The same was the fate of
prices of rice from 1950 to 1990.
The chart enclosed gives prices
of wheat from 1950-1990 and gives price comparison with 1950 prices in terms of
percentages. The prices of fruits, vegetables and industrial crops adjust
according to the prices of wheat, as people would fill their bellies with wheat
and rice if fruits and vegetables were costly.
The government also controls
the price of meat, fish, chicken, milk, butter and etc., thereby seeing to it
that urban population gets these items at reasonably low rates, so as not to
resort to agitation.
In the workshop sponsored by
Planning Department, Government of Sindh on August 30-31, 1990, with
participation of Haris, Haris representatives, and specialists. I had expressed
my views as under:
As against the international prices of wheat to the tune of approx:
Rs.220.00 per 40 kg, the farmer was being given Rs.97 per 40 kg.
Farmers provide mutton and beef at the prices one fourth of those in the
Vegetables and fruits also being procured from farmers at one sixth of
the prices for the same commodities in the international market.
Farm Labor gets Rs.900 to Rs. 650 per month compared to Rs.2, 800 to
Rs.3,000 earned by the city labor.
Minimum wages fixed by the government are Rs.1, 500 per month for the
labor class plus bonus, insurance, medical and other facilities.
Land owners with medium sized holdings i.e., 50 to 200 are getting more
produce than those with less than 50 acres and more than 200 acres, Land owners
with less than 50 acres do not normally have the resources of capital for the
inputs, whereas those with more than 200 acres cannot manage effectively.
Imbalance/disparity in agricultural price structure is the root cause of
rural poverty and problems pertaining to law and order.
Over the past ten years ineffectiveness of the program has re4sulted in
an increase in the area under water logging and salinity in Sindh by about 50%,
whereas through the same program it has reduced by about 49% in the Punjab, with
the blessings of WAPDA.
Consequences of price control.
Consequences of low prices of
agricultural commodities are:
- Low margins of profit to the
- Low capacity to develop the
- Lack of interest in spending
on inputs like, water management, ground water development, irrigation
techniques for saving water, applying optimum fertilizer, procuring better
seeds, optimum use of plant protection measures, capital cost of structures
for efficient farming, precision land leveling, introducing new crops and etc.
- Lack on inputs further
reduces ability to spend on input, and low levels of yields are maintained.
The yields of all agricultural commodities including fruits, vegetables, and
grasses are 1/3rd of those in advanced countries.
- Low salaries to farm labor.
- Low ability of farmer to
improve his lot, as well as that of his family.
- He cannot support his family
and has to economize on food in-take, war cheap clothes, move bare-footed.
- The low standards of food
further cause diseases in the family and high mortality as well as low life
- The farm family is not able
to earn required calories of food. For rural Sindh the present average is 1600
kilo calories for females and 2000 kilo calories for males falling short by
20%, which is acquired by browsing of wild plant-food like berries, young
leaves of peas and beans, stolen vegetables and sugar cane and doing extra
jobs at home or out side for some one.
- The food of most of rural
labor force, tenant farmers and small owner cultivators has been reduced to
cereals taken with tea or occasionally with peas and beans.
- Animal protein is taken
hardly once a month.
- Milk is produced for sale,
and poor of above classes hardly take it.
- The research of past 20
years has shown that if at least ½ kg milk is not taken by children under 14
years, they become mentally retarded and stupid, and this is common occurrence
in Sindh of to-day i.e., new population form poor class is low in I.Q. and is
Why prices are controlled?
- Prices are controlled to
provide cheap labor to the industry. The industry exports manufactured goods
at international prices, and over and above that, they earn bonus. Thus the
industry makes high margin of profits, and they keep expanding and putting up
new industries from the profits. The city labor can fight for the wages, but
they are provided cheap grains, vegetables, meat, milk and fruit. They are
also provided free medical assistance, the bill being about Rs.500 per month
per worker’s family. Leave salary, gratuity and leave fare assistance takes
him to his home village on vacation or provides extra money for family if he
stays in the town he works in. He raised no voice, and if he does, wages are
increased slightly and industrialist is allowed to make profits.
- As against this 100% of land
owners are bankrupt and almost all of them take loans from banks for raising
- Loans for industry are
allowed against urban property and are allowed at 75% of value of property.
Loans against land are paid on unit basis. A land of 40 units is sold at
Rs.40, 000-50,000 per acre but the land owner can get only Rs.3, 000 for
development from banks i.e., 10% or less of value.
Comparison of prices of wheat
form 1975 to 1994 in terms of real money considering the inflation.
of 1975 price
This is in general philosophy of price
control of agricultural commodities.
Article from: Sindh Quarterly.