Government urged to exclude flour from Ramazan package
Annual wheat procurement drive coincides with the fasting month
LAHORE:
Flour millers and former office bearers of the Pakistan Flour Mills Association (PFMA) urged the Punjab government to refrain from including flour in the upcoming Ramazan package.
The subsidy given on flour may benefit other people rather than general consumers, they highlighted while speaking to members of the Agriculture Journalists Association on Saturday. PFMA North Zone Former Chairmen Haji Muhammad Bashir and Muhammad Khalique Arshad pointed out that the government’s annual wheat procurement drive coincides with the holy month of Ramazan.
During the drive, the government will buy wheat for Rs1,300 per mound, while the wheat released from government warehouses for the flour milling industry will be provided at a subsidised rate of Rs800 per mound due to the Ramazan package, they elaborated.
There is a difference of Rs500 in official procurement and subsidised Ramazan package rates which may encourage corruption, they stated. Due to the two things coinciding, wheat rates will be lowered than the current market price. There has been a Rs20 decline in the price of a 20kg bag of flour. Prices are expected to drop another Rs10 after fresh produce enters the market, they informed.
Arshad urged the government to distance itself from the wheat procurement process and to release a pricelist for wheat at the start of the procurement season so that the private sector can also participate.
In his opinion, the amount of money saved by providing subsidised rates can instead be provided to farmers to lower seed, fertiliser, diesel, electricity and water prices. This will lower wheat prices which in turn will lower flour prices, he added.
As prices decrease: Punjab sees ‘healthy’ wheat production
“Currently, wheat prices in Pakistan are around $350 per ton, while around the world they are approximately $210 per ton,” he informed.
The Pakistan Agricultural Services and Supplies Corporation (PASSCO) and all provincial governments and buy around 7.5 million tons of wheat annually for Rs1,300 per mound. They spend another Rs400 per mound on storage, transportation, mark-ups and salaries.
However, the government issues wheat to flour mills at Rs1,275 per mound while the subsidy benefits many. In his view, instead of providing it to everybody the government should provide subsidies to those who deserve it.
They also proposed that the government create a permanent window for exporting wheat. The world should be made aware of what we can produce so that we can develop an international market for Pakistani wheat and its products, they added.
Closed industrial units can also be made functional in this way, fetching foreign exchange for the country and creating job opportunities, they elaborated.
PFMA officials expressed regret over the fact that Pakistan was losing to traditional Afghan markets because of government rates and inflated prices. To battle this, the government should devise a policy after consulting flour millers, they said. They also urged the government to construct steel silos instead of traditional ones for storing wheat to curb wastage and maintain quality.
The Punjab government recently announced plans to set up 306 Ramazan bazaars across the province. During a price control committee meeting held last week, all deputy commissioners were directed to submit their plans by April 10. In the meeting it was also decided that all bazaars will be operational by May 15. Further, the agriculture department will set up fair price shops in all bazaars.
Published in The Express Tribune, April 15th, 2018.
Flour millers and former office bearers of the Pakistan Flour Mills Association (PFMA) urged the Punjab government to refrain from including flour in the upcoming Ramazan package.
The subsidy given on flour may benefit other people rather than general consumers, they highlighted while speaking to members of the Agriculture Journalists Association on Saturday. PFMA North Zone Former Chairmen Haji Muhammad Bashir and Muhammad Khalique Arshad pointed out that the government’s annual wheat procurement drive coincides with the holy month of Ramazan.
During the drive, the government will buy wheat for Rs1,300 per mound, while the wheat released from government warehouses for the flour milling industry will be provided at a subsidised rate of Rs800 per mound due to the Ramazan package, they elaborated.
There is a difference of Rs500 in official procurement and subsidised Ramazan package rates which may encourage corruption, they stated. Due to the two things coinciding, wheat rates will be lowered than the current market price. There has been a Rs20 decline in the price of a 20kg bag of flour. Prices are expected to drop another Rs10 after fresh produce enters the market, they informed.
Arshad urged the government to distance itself from the wheat procurement process and to release a pricelist for wheat at the start of the procurement season so that the private sector can also participate.
In his opinion, the amount of money saved by providing subsidised rates can instead be provided to farmers to lower seed, fertiliser, diesel, electricity and water prices. This will lower wheat prices which in turn will lower flour prices, he added.
As prices decrease: Punjab sees ‘healthy’ wheat production
“Currently, wheat prices in Pakistan are around $350 per ton, while around the world they are approximately $210 per ton,” he informed.
The Pakistan Agricultural Services and Supplies Corporation (PASSCO) and all provincial governments and buy around 7.5 million tons of wheat annually for Rs1,300 per mound. They spend another Rs400 per mound on storage, transportation, mark-ups and salaries.
However, the government issues wheat to flour mills at Rs1,275 per mound while the subsidy benefits many. In his view, instead of providing it to everybody the government should provide subsidies to those who deserve it.
They also proposed that the government create a permanent window for exporting wheat. The world should be made aware of what we can produce so that we can develop an international market for Pakistani wheat and its products, they added.
Closed industrial units can also be made functional in this way, fetching foreign exchange for the country and creating job opportunities, they elaborated.
PFMA officials expressed regret over the fact that Pakistan was losing to traditional Afghan markets because of government rates and inflated prices. To battle this, the government should devise a policy after consulting flour millers, they said. They also urged the government to construct steel silos instead of traditional ones for storing wheat to curb wastage and maintain quality.
The Punjab government recently announced plans to set up 306 Ramazan bazaars across the province. During a price control committee meeting held last week, all deputy commissioners were directed to submit their plans by April 10. In the meeting it was also decided that all bazaars will be operational by May 15. Further, the agriculture department will set up fair price shops in all bazaars.
Published in The Express Tribune, April 15th, 2018.