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KPK Wheat Smugglers Bring High Prices, and Hunger

Shabaz Sharif

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Trucks loaded with sacks of wheat are being smuggled across Pakistan’s borders into Afghanistan. Credit: Ashfaq Yusufzai/IPS

PESHAWAR, Pakistan, Jun 4 2014 (IPS) - With its lush valleys and well-watered plains, Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province produces plenty of food for the local population, including 10 million tons of wheat every year. So why are the people of this bountiful mountainous region going hungry?

The answer lies just across the 2,400-km-long border that separates the country from neighbouring Afghanistan, in the food-stalls, shops and grocery stores where the bulk of the KP’s foodstuffs are sold for hugely inflated prices.

Locals and experts blame the massive smuggling network that whisks wheat out of Pakistan’s frontier province, leaving behind an unsustainable demand for – and unaffordable price tags on – the basic commodity, which 65 percent of the population relies on as a staple.

According to Zahid Shinwari, president of the Khyber Pakhtunkhwa Chamber of Commerce and Industries, the KP loses some three million tons of wheat to smugglers every year, causing price spikes of over 33 percent.

“The problem gets particularly severe when the local harvesting season ends in June, because that’s when the aggressive smuggling begins,” the official told IPS.

While 50-kg bags of wheat cost nine dollars in 2013, that same quantity now sells for 11 and 12 dollars. At first glance the difference might not seem like much, but in a region where the average monthly income is 60 dollars, some families say the price rise could mean the difference between nourishment and hunger.

As it is, thousands here are walking a fine line. According to a 2008 survey conducted by the United Nations Children’s Fund (UNICEF), 65 percent of children and 40 percent of women living in the KP are malnourished. Take away their basic foodstuffs and the situation will only get worse, experts say.

Muhammad Haroon, a shopkeeper in KP’s capital Peshawar, says the problem is quickly reaching a crisis point, with some 500 to 600 trucks packed with wheat leaving the province every single day.

“We are not getting enough stock from the flourmills for local consumption,” the disgruntled grocer told IPS.

No sooner is the harvest gathered than smugglers make off with the bulk of it, while the rest is immediately purchased and hoarded by the wealthy, in a bid to avoid the inevitable price hikes that accompany the shortages.

In the end, says Haroon, it is the poor who suffer; a full 40 percent of the KP’s population lives below the poverty line, and they are the ones most affected.

On the other side of the border, the smugglers are seen as a godsend.

According to Abdul Qadir, an Afghan trader, his landlocked country has traditionally been dependent on Pakistan for its food requirements, including 80 percent of its wheat needs. Rice, oil, soap and pulses also make their way through checkpoints and onto the shelves of Afghan shops.

Qadir told IPS officials on both sides are equally complicit in the illicit operation because of the high bribes offered in exchange for safe passage through the busy Torkham border crossing close to KP, and the Wesh-Chaman border, which links the Pakistani city of Quetta with the Afghan city of Kandahar.

These bribes, which can reach 100 dollars per truck, push prices of the smuggled goods even higher – up to 45 dollars for a 50-kg sack of wheat – “but still Afghans buy them” according to the trader. He blamed a lack of water, overuse of pesticides and three decades of war for Afghanistan’s perennial food shortages.


Meanwhile, other provinces in Pakistan are starting to feel the heat of the illicit activity.

Chaudhry Ansar Javid, who heads the Sindh chapter of the Pakistan Flour Mills Association (PFMA), says his own province lost 800,000 tons of wheat to Afghanistan last year.

“The wheat flour produced in Sindh also reaches Central Asian states, as well as Iran, through the Chaman border crossing in Balochistan province,” he told IPS.

In the past 15 days alone, Javid said, the price of a 100-kg sack of wheat has soared from 20 to 25 dollars and could go on rising at a phenomenal rate unless the government takes immediate steps to curb the smuggling, or allows Pakistan to import enough wheat to account for the demand in neighbouring Afghanistan.

At present, Pakistan produces some 250 million tons of wheat per year, according to Anees Ashraf, president of the All Pakistan Flour Mills Association (APFMA).

“This includes 16 million tons in the Sindh province, 58 million in Punjab, 2.5 million in Balochistan and 10 million in KP,” he told IPS, adding that the latter has born the brunt of the smuggling operation.

Forced to seek alternative sources of this basic commodity, the KP government has come to rely heavily on some 400 trucks from the Punjab, which carry a daily supply of about 2,000 tons of wheat to the struggling region.

Now, even that lifeline is threatened by the fact that Afghan importers go directly to Punjabi wheat producers and buy up whatever stocks they can get, said Haji Musarrat Shah, vice president of the KP chapter of the APFMA.

Fearing its own shortages, the government of Punjab has imposed a ban on wheat stocks to the Khyber Pakhtunkhwa, he told IPS.

Officials say this move is illegal and are now pressing the Punjab government to lift the ban and spare the people of KP from high prices and hunger.

“Under the constitution it is illegal to stop the supply of anything from one province to another,” KP Chief Minister Pervez Khattak told IPS, adding, “The federal government should intervene.”

Some say the situation is creating a powder keg, with the local population growing ever more hostile towards their neighbours. Already KP is home to some three million Afghan refugees who have been dependent on limited local resources for the past 30 years, according to Khattak.

If prices keep rising, it will put undue pressure on a region that is already fraught with poverty and militancy

Wheat Smugglers Bring High Prices, and Hunger | Inter Press Service

Incompetent KPK goverment instead of doing anything to stop smugling, blame Punjab gov.
 
If what is being said about bribes at the border on both sides is true, this could be fairly easily solved.

But there is still the issue that selling in Afghanistan is more profitable than Pakistan. Is Afghanistan's population that much wealthier than the local Pakistani population, that they can pay such premiums? Or is it going to warlords?
 
@ajpirzada as you can many millions tons of wheat get smugled in to Afghanistan. Smuglers and corrupt KPK officials who allow this to happen and then cry why Punjab ban wheat movement. Punjab cheap wheat does not reach average KPK people but instead get smugled in to Afghanistan with 4-5 times higher price per kg.

If what is being said about bribes at the border on both sides is true, this could be fairly easily solved.

But there is still the issue that selling in Afghanistan is more profitable than Pakistan. Is Afghanistan's population that much wealthier than the local Pakistani population, that they can pay such premiums? Or is it going to warlords?

Afghanistan have severe shortage of wheat unlike Pakistan. And yes it can be solved if KPK goverment do something about it.
 
Afghanistan have severe shortage of wheat unlike Pakistan. And yes it can be solved if KPK goverment do something about it.

Oh OK. But are the flour harvesters in Pakistan in trouble for this? It seems like there would be no way for them not to know who they are selling the wheat to, and wouldn't they be profiting from the higher prices?
 
Oh OK. But are the flour harvesters in Pakistan in trouble for this? It seems like there would be no way for them not to know who they are selling the wheat to, and wouldn't they be profiting from the higher prices?

Only corrupt officials who allow this and smuglers get higher profits.
 
Don't understand.. how afghans are able to buy costly smuggled wheat where relatively well to do Pakistanis are not ?
 
Don't understand.. how afghans are able to buy costly smuggled wheat where relatively well to do Pakistanis are not ?

In Pakistan you are not allowed to sell wheat that expensive. Afghans pay 4-5 higher price for smugled wheat because of wheat shortage.
 
This is indeed a recurring problem. This happens every year.

1. During harvest season, Pashtun smugglers offer hard cash for wheat in Punjab.
2. The Punjab government also buys to maintain its stocks.
3. When excess supply dries up, and smugglers have done their job with complicity of corrupt elements in KPK, Punjab Government puts curbs on movement of Wheat.
4. KPK government cries about Punjab hording wheat and not caring for hungry people of KPK.
5. These protests are often accompanied by threats to disrupt electricity supply to Punjab.
6. Federal government intervenes.

Wait for #5. But this time #6 might not happen so easily.

Instead of putting their house in order, KPK government does this every year as a matter of routine. I have yet to see a year in the past decade when this does not happen.

KPK's black economy is very strong, there is little conception of paying direct taxes. Smuggling forms an important component of this black economy, and seems as though KPK government is unwilling to do anything about it.
 
Trucks loaded with sacks of wheat are being smuggled across Pakistan’s borders into Afghanistan. Credit: Ashfaq Yusufzai/IPS

PESHAWAR, Pakistan, Jun 4 2014 (IPS) - With its lush valleys and well-watered plains, Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province produces plenty of food for the local population, including 10 million tons of wheat every year. So why are the people of this bountiful mountainous region going hungry?

The answer lies just across the 2,400-km-long border that separates the country from neighbouring Afghanistan, in the food-stalls, shops and grocery stores where the bulk of the KP’s foodstuffs are sold for hugely inflated prices.

Locals and experts blame the massive smuggling network that whisks wheat out of Pakistan’s frontier province, leaving behind an unsustainable demand for – and unaffordable price tags on – the basic commodity, which 65 percent of the population relies on as a staple.

According to Zahid Shinwari, president of the Khyber Pakhtunkhwa Chamber of Commerce and Industries, the KP loses some three million tons of wheat to smugglers every year, causing price spikes of over 33 percent.

“The problem gets particularly severe when the local harvesting season ends in June, because that’s when the aggressive smuggling begins,” the official told IPS.

While 50-kg bags of wheat cost nine dollars in 2013, that same quantity now sells for 11 and 12 dollars. At first glance the difference might not seem like much, but in a region where the average monthly income is 60 dollars, some families say the price rise could mean the difference between nourishment and hunger.

As it is, thousands here are walking a fine line. According to a 2008 survey conducted by the United Nations Children’s Fund (UNICEF), 65 percent of children and 40 percent of women living in the KP are malnourished. Take away their basic foodstuffs and the situation will only get worse, experts say.

Muhammad Haroon, a shopkeeper in KP’s capital Peshawar, says the problem is quickly reaching a crisis point, with some 500 to 600 trucks packed with wheat leaving the province every single day.

“We are not getting enough stock from the flourmills for local consumption,” the disgruntled grocer told IPS.

No sooner is the harvest gathered than smugglers make off with the bulk of it, while the rest is immediately purchased and hoarded by the wealthy, in a bid to avoid the inevitable price hikes that accompany the shortages.

In the end, says Haroon, it is the poor who suffer; a full 40 percent of the KP’s population lives below the poverty line, and they are the ones most affected.

On the other side of the border, the smugglers are seen as a godsend.

According to Abdul Qadir, an Afghan trader, his landlocked country has traditionally been dependent on Pakistan for its food requirements, including 80 percent of its wheat needs. Rice, oil, soap and pulses also make their way through checkpoints and onto the shelves of Afghan shops.

Qadir told IPS officials on both sides are equally complicit in the illicit operation because of the high bribes offered in exchange for safe passage through the busy Torkham border crossing close to KP, and the Wesh-Chaman border, which links the Pakistani city of Quetta with the Afghan city of Kandahar.

These bribes, which can reach 100 dollars per truck, push prices of the smuggled goods even higher – up to 45 dollars for a 50-kg sack of wheat – “but still Afghans buy them” according to the trader. He blamed a lack of water, overuse of pesticides and three decades of war for Afghanistan’s perennial food shortages.


Meanwhile, other provinces in Pakistan are starting to feel the heat of the illicit activity.

Chaudhry Ansar Javid, who heads the Sindh chapter of the Pakistan Flour Mills Association (PFMA), says his own province lost 800,000 tons of wheat to Afghanistan last year.

“The wheat flour produced in Sindh also reaches Central Asian states, as well as Iran, through the Chaman border crossing in Balochistan province,” he told IPS.

In the past 15 days alone, Javid said, the price of a 100-kg sack of wheat has soared from 20 to 25 dollars and could go on rising at a phenomenal rate unless the government takes immediate steps to curb the smuggling, or allows Pakistan to import enough wheat to account for the demand in neighbouring Afghanistan.

At present, Pakistan produces some 250 million tons of wheat per year, according to Anees Ashraf, president of the All Pakistan Flour Mills Association (APFMA).

“This includes 16 million tons in the Sindh province, 58 million in Punjab, 2.5 million in Balochistan and 10 million in KP,” he told IPS, adding that the latter has born the brunt of the smuggling operation.

Forced to seek alternative sources of this basic commodity, the KP government has come to rely heavily on some 400 trucks from the Punjab, which carry a daily supply of about 2,000 tons of wheat to the struggling region.

Now, even that lifeline is threatened by the fact that Afghan importers go directly to Punjabi wheat producers and buy up whatever stocks they can get, said Haji Musarrat Shah, vice president of the KP chapter of the APFMA.

Fearing its own shortages, the government of Punjab has imposed a ban on wheat stocks to the Khyber Pakhtunkhwa, he told IPS.

Officials say this move is illegal and are now pressing the Punjab government to lift the ban and spare the people of KP from high prices and hunger.

“Under the constitution it is illegal to stop the supply of anything from one province to another,” KP Chief Minister Pervez Khattak told IPS, adding, “The federal government should intervene.”

Some say the situation is creating a powder keg, with the local population growing ever more hostile towards their neighbours. Already KP is home to some three million Afghan refugees who have been dependent on limited local resources for the past 30 years, according to Khattak.

If prices keep rising, it will put undue pressure on a region that is already fraught with poverty and militancy

Wheat Smugglers Bring High Prices, and Hunger | Inter Press Service

Incompetent KPK goverment instead of doing anything to stop smugling, blame Punjab gov.

I thanked your post for the informative article u posted.

now coming to the smuggling.. almost all of the border shared with Afghanistan is FATA (on the KPK side). It is Federation's responsibility to check what goes and comes from Afghanistan via FATA.
KPK on its part should also put in some serious effort but without Federation taking the front role there is nothing KPK can do.
Its unconstitutional to stop the flow of goods and people to and from any part of Pakistan. You may want to change the constitution.
 
Typical! dumping flaws on others. Like I said before, If KPK govt did procure wheat from PASCO and allowed its own to be freely smuggled to afghans, such things are bound to happen. Now KPK government should man up and accept their failure.

Typical, instead of blaming incompetent KPK gov who have done nothing to stop smugling lets blame N.
Don't you know ,"Saaf Challi, Shaffaf Chali".

I thanked your post for the informative article u posted.

now coming to the smuggling.. almost all of the border shared with Afghanistan is FATA (on the KPK side). It is Federation's responsibility to check what goes and comes from Afghanistan via FATA.
KPK on its part should also put in some serious effort but without Federation taking the front role there is nothing KPK can do.
Its unconstitutional to stop the flow of goods and people to and from any part of Pakistan. You may want to change the constitution.
Wheat procurement and management is carried out by provincial government. The restrictions of interprovincial movements are not placed by federation but by provincial governments themselves.
 
Typical! dumping flaws on others. Like I said before, If KPK govt did procure wheat from PASCO and allowed its own to be freely smuggled to afghans, such things are bound to happen. Now KPK government should man up and accept their failure.


Don't you know ,"Saaf Challi, Shaffaf Chali".


Wheat procurement and management is carried out by provincial government. The restrictions of interprovincial movements are not placed by federation but by provincial governments themselves.

i know. and your point is?
 
i know. and your point is?
KPK on its part should also put in some serious effort but without Federation taking the front role there is nothing KPK can do.

KPK's black economy is very strong, there is little conception of paying direct taxes. Smuggling forms an important component of this black economy, and seems as though KPK government is unwilling to do anything about it.
I remember in PPP regime tax was levied over wood industry but ANP protested and demanded federation to withdraw this citing its use in "Pencils"..........Any attempt to tax Transportation and Woodworks will always attract protest from KPK government (whosoever may be there)
 
If what is being said about bribes at the border on both sides is true, this could be fairly easily solved.

But there is still the issue that selling in Afghanistan is more profitable than Pakistan. Is Afghanistan's population that much wealthier than the local Pakistani population, that they can pay such premiums? Or is it going to warlords?

International prices are higher than Local market, both rich and poor eat the same roti so its not like rich will pay more for roti while poor will settle on cake. Its further smuggled to central asian states.

When Punjab says take flour instead of wheat because flour has much smaller life than wheat and hence less chances of smuggling then KPK govt start crying and start using race card.
 

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