Adding to the agricultural sector’s woes, it has been reported that manufacturers have increased the price of urea by Rs80 per bag. This development raises serious concerns for our wheat farming prospects in the coming year, especially when factoring into account the global wheat shortage that is imminent due to the ongoing Russia-Ukraine war.
While the impact of this price increase may not be immediate in the market considering how demand for urea is at its lowest currently, the pinch will be felt severely across the country in June and July when cotton, cane and coarse rice would need its application. As a stop gap measure, the government is currently instructing the industry to maintain contingency stock to cushion the blow.
This is not the first time we have run into such issues, and it is imperative that going forward we seek a permanent solution that is sustainable. That would mean being self-sufficient when it comes to items such as wheat and sugar. Despite the fact that both of these are produced locally, they still contribute to our dismal current account balance. Even after being one of the top ten wheat producers in the world, we are still unable to meet our local demands due to shrinking acreage, poor application of fertiliser, water scarcity, and limited certified seeds among other issues. These factors of course further our reliance on imported grain, and considering that we will need to import around four million tons of wheat to meet the deficit, the crop import bill will be exorbitant given the disruptions and price hikes in the global market.
There are a few long-term measures we should seriously consider. The first would be to incentivise farmers to sow wheat, of course. But in order to circumvent the factors that cannot be influenced by farmers, the introduction of newer seeds that are more productive, climate resilient and disease resistant should be facilitated. The challenge is not just releasing these seed varieties, but also getting them to the markets quickly—seed replacement rate is quite low—so that wheat growers can realise the benefits.
To formulate and then implement such long-term sustainable measures however, we will need to re-evaluate our conception of growth however. The recent growth push that we have been witnessing has primarily been import based despite the burgeoning current account deficit. Given how the global economy is shaping up, a lot of countries are now not just thinking about growth, but growth that is sustainable and at a controlled pace so that citizens can be shielded from inflationary pressures and that their purchasing power remains intact. The way forward is placing a greater emphasis on indigenous production and being self-reliant, otherwise we will perpetually find ourselves in this Groundhog Day scenario of finding ways to balance out our current account deficit.
While the impact of this price increase may not be immediate in the market considering how demand for urea is at its lowest currently, the pinch will be felt severely across the country in June and July when cotton, cane and coarse rice would need its application. As a stop gap measure, the government is currently instructing the industry to maintain contingency stock to cushion the blow.
This is not the first time we have run into such issues, and it is imperative that going forward we seek a permanent solution that is sustainable. That would mean being self-sufficient when it comes to items such as wheat and sugar. Despite the fact that both of these are produced locally, they still contribute to our dismal current account balance. Even after being one of the top ten wheat producers in the world, we are still unable to meet our local demands due to shrinking acreage, poor application of fertiliser, water scarcity, and limited certified seeds among other issues. These factors of course further our reliance on imported grain, and considering that we will need to import around four million tons of wheat to meet the deficit, the crop import bill will be exorbitant given the disruptions and price hikes in the global market.
There are a few long-term measures we should seriously consider. The first would be to incentivise farmers to sow wheat, of course. But in order to circumvent the factors that cannot be influenced by farmers, the introduction of newer seeds that are more productive, climate resilient and disease resistant should be facilitated. The challenge is not just releasing these seed varieties, but also getting them to the markets quickly—seed replacement rate is quite low—so that wheat growers can realise the benefits.
To formulate and then implement such long-term sustainable measures however, we will need to re-evaluate our conception of growth however. The recent growth push that we have been witnessing has primarily been import based despite the burgeoning current account deficit. Given how the global economy is shaping up, a lot of countries are now not just thinking about growth, but growth that is sustainable and at a controlled pace so that citizens can be shielded from inflationary pressures and that their purchasing power remains intact. The way forward is placing a greater emphasis on indigenous production and being self-reliant, otherwise we will perpetually find ourselves in this Groundhog Day scenario of finding ways to balance out our current account deficit.
