This has been a difficult season for farmers in Sindh, as four major crops -- wheat, paddy, cotton and sugarcane -- witnessed a sharp slump in prices compared to last year. The prices tumbled not just because of international market chains and external factors but also because the local, powerful lobbies managed to distort domestic market through their nefarious tactics.

Farmers’ organisations estimate a colossal loss of over Rs58 billion to be endured by the farmers in the province.

Ironically, it is not the inclement climate but the Sindh government’s lethal mix of mismanagement and corruption that has brought agriculture economy to its knees in the province. Rural Sindh, the only political bastion of Pakistan Peoples’ Party presently, is run inefficiently resulting in administrative chaos.

Before the ongoing wheat crisis unfolded, the province was in the limelight due to a vortex of sugarcane prices. The sugar industry in Sindh is in the clutches of feudal lords who control treasury benches and conveniently outmaneuver sugarcane growers. The Sindh government reneged on officially fixed prices of sugarcane and triggered a spate of protests by sugarcane producers. But no one came to help them as the stalwarts of the ruling party own most of the sugar mills in the province. Even court orders were crumpled leaving the sugarcane growers in the lurch. The fiasco caused a loss of more than Rs4 billion to the growers.

Last year, rice prices also declined in the international market. In Sindh, farmers were compelled to sell non-Basmati varieties of paddy for just Rs725-750 per 40kg to the agents of food processing companies and rice millers. Otherwise, Basmati varieties fetched Rs1000-1050 per 40kg. Farmers complain that by selling their commodity at such prices they cannot even extract their input cost.

Due to low local consumption, rice is mostly exported from Pakistan. Whenever prices drop in the international market, middlemen exploit the situation and arbitrarily fix prices of their own choice. This happened this year too and farmers were swindled by exploitative market players. At a loss of approximately Rs150 per maund, farmers in Sindh lost more than Rs12 billion by selling a surplus of three million tonnes in the adverse market.

Cotton is a vital cash crop that is produced mostly in the left bank districts of Sindh. This year favourable weather and hybrid seed augmented the cotton yield in the province. However, the prices plunged in the international market. As a result, cotton prices fell in the domestic market to Rs500 per maund. Trading Corporation of Pakistan could not intervene to mitigate the miseries of hapless cotton growers. Farmers are likely to suffer a staggering loss of Rs25 billion.

This is a big blow to the whole cotton industry in the province.

The wheat crisis further aggravated the growers’ problems. The federal government played havoc by allowing import of 0.7 million tonnes of substandard wheat from Ukraine, despite the fact that the Sindh government had a stockpile of 1.2 million tonnes.

The import was allowed without imposing any import duty.

The imported wheat was sold in Karachi precluding the release of wheat from the local warehouses. This compelled the Sindh government to slash its wheat procurement target from 1.2 million tonnes to 0.9 million tonnes. The Sindh government implored the federal government to export 0.66 million tonnes of wheat at a subsidy of USD50 per tonne.

However, the Economic Coordination Committee allowed the export of only 400,000 tonnes at a subsidy USD45 per tonne.

A bumper harvest in Sindh thus found no space in the market.

Sindh produced an estimated 4.5 million tonnes of wheat this year. Setting aside about 2 million tonnes for self-consumption, a sizeable surplus of 2.5 million tonnes was to be sold in the market.

Bur, as the Sindh government slashed the procurement target, the market got jittery. While small farmers stashed wheat for personal consumption and big monsters captured gunny bags. Consequently, the middle-size farmers ran from pillar to post with a forlorn hope of getting hold of gunny bags that were being illegally sold at a premium price of Rs100 to Rs200. The food department officials distributed wheat bags to their touts who churned hefty amounts for their masters through unchecked black sale.

The growers cried foul to no avail as the market monsters unleashed all their might in the market.

Resultantly, the prices tumbled and compelled farmers to compromise on the officially fixed price of Rs1,300 to between Rs1,100 and Rs900 per maund in the open market. This is likely to cost some Rs7 billion loss to the growers.

This manipulation of market is happening in a province where malnutrition is rampant in spite of abundance of wheat. According to some reports, almost half of the children in Sindh under the age of five years suffer from malnutrition. The blowback of wheat crisis may trigger a fresh wave of food crisis. A province where agriculture is the cornerstone of local economy, such market shocks can multiply a pervasive poverty. Millions of poor people, especially in rural areas, owe their sustenance to performance of agriculture sector. A complete crash of commodity market will have grave consequences for the poor segments of population in Sindh.

In case of cotton and paddy, vacillating international markets was a major cause that devastated the rural economy but, in case of sugarcane and wheat, it was purely the political and administrative collusion that caused hefty losses to the farmers in Sindh.

Spike in the cost of farm inputs has also added to the miseries of farmers. Since sugar industry and wheat market is controlled by powerful lobbies with strong political props, the provincial government completely failed to safeguard interests of the farmers.

Sindh is a classic example of how markets are steered by an unholy nexus of political and administrative forces that squashes producers in spite of a bumper yield. This also demonstrates how penury persists amid a super harvest.

A lesson can easily be drawn that food insecurity is not caused by the grain produce, rather it is an outcome of failed governance system.