In Pakistan, as the harvesting season unfolds for major crops like wheat, rice, maize, cotton, and oilseeds, market dynamics invariably lead prices to their annual lows. This pattern has been particularly pronounced in Punjab during the recent wheat season.

The prices experienced a significant downturn, plummeting by approximately 40 per cent to hover between Rs2,400 to Rs3,000 per 40 kilograms, well below the government’s support price of Rs3,900. As a consequence, farmers have suffered financial losses.

This phenomenon is primarily driven by a market glut resulting from oversupply. Two key factors contribute to this situation. Firstly, most farmers are facing financial constraints and urgently need funds to repay bank loans, settle outstanding credits for fertiliser and pesticide dealers, and procure inputs for the next crop. Secondly, there is no dearth of farmers who lack adequate storage facilities, such as godowns, to store harvested crops.

In either scenario, farmers must sell their produce immediately after harvest, regardless of market prices. However, the trend observed in previous years suggests that market prices typically rise towards the end of the harvest season as the supply to grain markets diminishes.

Improved crop storage capacities could help prevent market glut, stabilise wheat prices and reduce post-harvest losses

Addressing these challenges to ensure a more sustainable and resilient agricultural market requires three types of interventions: improving farmers’ access to credit, enhancing storage facilities for agricultural produce, and implementing policies that stabilise prices during peak harvest periods — the government’s wheat procurement program is a........

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