Market manipulators given clean chit in wheat inquiry report

LAHORE: The inquiry ordered by Prime Minister Imran Khan has meticulously protected wheat mafia involved in corrupt practices of black marketing and price hike as it wrongly portrays how supply chain works.

Completely ignoring the fact that the country had sufficient grains for meeting demand throughout the marketing year, the undue emphasis of PM’s inquiry committee was on relatively lesser amount of procured wheat while unnecessarily comparing it with the data of last five years.

In a sheer contrast, the worthy members of the committee overlooked gross mismanagement of officials concerned in monitoring flow of highly-subsidised grains to flour mills.

The intense malpractices of government staff in this connection, particularly in Punjab, Sindh and Khyber Pakhtunkhwa, resulted in criminal negligence towards managing stocks supply to flour mills and subsequent distribution in the market.

Had officials concerned been able to professionally made available stocks and monitored utilisation of wheat by flour mills, there would have been a complete smooth flow of wheat in the whole supply chain throughout the year in every nook and corner of the country.

Pakistan has been self-sufficient in production to meet per capita consumption and in terms of available stocks during 2019/20 wheat season. Even as per progressive assessment adopted by the inquiry committee, domestic wheat stocks were more than sufficient for ensuring food security in the country, showing close to one million tons of surplus stock coupled with 10 percent strategic reserves.

In its finding, the inquiry committee’s members asserted low procurement of wheat by public sector departments in comparison with the data of last five years, terming it the prime factor leading to wheat crisis. However, this is totally wrong and myopic view of wheat supply chain. Pakistan had ample wheat reserves after end of purchase drive last year even if public sector departments were not able to achieve their respective wheat procurement targets.

The per capita wheat consumption of 115 kilograms calculated by inquiry committee has been on modest side. But even if yearly demand is calculated according to 124.3 kg internationally-recognized per capita consumption indicator, Pakistan could still have around 1.2 to 1.5 million tons as strategic reserve/carryover stock by the end of wheat marketing year 2019/20.

In line with per capita consumption, there was not dearth of wheat in the country.

Moreover, the committee ignored huge releases made to flour mills as provincial food department failed to check draining of highly subsidised wheat stocks. In fact, there are widespread allegations that instead of becoming a regulator of wheat sector in the province, the food department becomes business partner and failed to take any measure for ensuring supply of flour in the market.

Instead of recommending strictest possible measures against flour mills involved in black marketing of wheat and price hike, the inquiry committee, spearheaded by investigative agencies only pinpointed apparent slackness of some officials during procurement drive. Removal of briefly-appointed secretary food Punjab has been a complete surprise for many. The senior bureaucrat’s alleged inefficiency is certainly not believed to be motivated by any sort of corruption. The official was appointed on the post of secretary food on April 16, 2019 just on the onset of wheat procurement campaign. Coincidentally, this is the same week when successive spells of gusty winds and rainstorms wreak havoc with mature wheat crop, damaging around one million tons of produce. Unprecedented rainfall right in the middle of maturity stage revised down wheat production estimates and changed whole grain outlook as harvesting was delayed by about two weeks.

Even an ordinary person understands that wheat harvesting and supply to market could not be possible in such wet conditions for around two weeks and the fact that subsequent dent in final output ultimately has an impact on market dynamics/sentiments. Exactly same thing happened and wheat from Sindh started to hit Punjab markets following delay in harvesting in central parts of country.

This development led to unfavourable conditions for Sindh Food Department also as rate of wheat surged in the open market and consequently motivated Sindh farmers to sell their produce to private buyers to fetch higher prices.

As intense rains dampened Punjab wheat harvesting, Nasim Sadiq, the then newly appointed provincial food secretary had to redraw procurement plan keeping in view changing grain market dynamics.

His only task at that moment was to try to buy as much wheat as possible in the given circumstances as all preparations in this regard had already been made before his appointment.

The preparation for storage, financial arrangements with banks, purchase of gunny bags, transfer posting of field staff and setting district procurement targets were all done well before his deputation on the gigantic task of procuring wheat in a lean season.

Sharing a depiction of how Sadiq was made to run wheat procurement campaign, an official observed that he was asked to sit on driving seat after boarding a moving train. During his only about two-month stint (April 16-June 17, 2019) as provincial secretary, he successfully managed to procure biggest quantity last year among all public sector departments, which stood at around 83 percent or 3.315 million tons of wheat out of upward revised provincial target of 4 million tons.

On the other hand, Sindh surprisingly could not procure a single grain, yes a single grain, from growers. Pakistan Agricultural Storage and Services Corporation, a federal procurement agency, could only manage 61 percent or 0.679 million tons against 1.10 million tons target. Khyber Pakhtunkhwa bought 70.27 percent or 0.052 million tons over 0.074 million tons target.

Wheat procurement targets are not easy to achieve for public sector departments as government purchase grains on a fixed amount irrespective of market conditions and crops size. Conversely, flour mills and private buyers can easily manipulate market while taking advantage of changing dynamics of wheat market and used to succeed in acquiring sizeable share.

Despite all challenges especially associated with damage to crop, all public sector departments could procure 62 percent or 4.046 million tons wheat last year with Punjab occupying a lion’s share of nearly 82 percent or 3.315 million tons out of the national target.

Punjab succeeded in maintaining ample stocks of 4.88 million tons including carryover stocks of 1.56 million tons that could be more than enough if compared with the yearly requirements. Punjab successfully completed procurement drive despite the fact that wheat price was relatively high in the open market, which restricted its flow to food department as its price was capped at Rs1,300 per 40kg. Moreover, Ramazan and Eidul Fitre during campaign hindered supply of wheat due to obvious reasons.

By end of wheat procurement in June, Sadiq was abruptly transferred without any valid reason. This scribe told Sadiq about a week before issuance of his transfer order that he was going to be removed shortly on the behest of flour mill mafia. A bit surprised Sadiq said he was prepared to relinquish charge anytime as nothing was at stake for him.

A market insider told this scribe that wheat flour mafia doesn’t want to see him on the post of food secretary during release of stocks to flour mills. The mafia clearly knew that had Sadiq, having repute of an honest as well as competent official, not been removed from the crucial post, there would have been no black marketing and soaring prices of wheat.