ISLAMABAD: The Economic Coordination Committee (ECC) on Wednesday increased the minimum support price of wheat by Rs50 to Rs1,350 per 40 kg in an attempt to safeguard the interest of growers and ensure food security for the consumers.
The ECC meeting, chaired by Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh, was told that the minimum support price of Rs1,300 per 40 kg had not been enhanced for the past five years.
However, in view of factors such as world wheat supply situation, cost of production, export-import parity prices and domestic producer prices, an appropriate support price for the next wheat crop was necessary.
The cost of production in the financial year 2019-20 has increased to Rs1,349.57 per 40 kg in Punjab and Rs1,315.72 per 40 kg in Sindh, according to findings of the Agriculture Policy Institute. Apart from that, world wheat prices were hovering around Rs1,575 per 40 kg including duties and Rs1,440 without duties.
Govt likely to raise wheat, sugarcane support prices
Keeping these in view, the ECC decided to enhance the minimum support price for the next wheat crop to Rs1,350 per 40 kg.
The ECC also asked the Ministry of National Food Security and Research to approach provinces well in time in order to push them to make adequate wheat purchases in the coming season. If the provinces failed to meet the goal, then any request from them for the release of wheat from Pakistan Agricultural Storage and Services Corporation (Passco) stocks would result in 100% payment of incidental charges.
The ECC suggested that chief secretaries of the provinces or their representatives should be invited to the next ECC meeting. It directed the Ministry of Finance to give a detailed presentation on the rising debt level due to the commodity operation as it had already crossed Rs450 billion.
The ECC also considered a set of proposals from the Petroleum Division about the provision of utilities, particularly gas connections, to the Special Economic Zones (SEZs).
The ECC constituted a committee after discussing various proposals for the supply of gas, electricity and other facilities to the SEZs. The committee would be headed by Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood and comprise representatives of the Petroleum Division and Board of Investment. It would try to resolve minor issues as pointed out during the discussion and would come up with proposals in the next ECC meeting for approval.
The ECC took up a proposal of the Power Division, which sought approval for an amendment to the implementation agreement governing Thal Nova Power Thar Private Limited and Thar Energy Limited. According to the amendment, the time period for the exercise of the government of Pakistan’s right to terminate both projects would be increased from 400 days to 490 days.
The ECC was told that there was no financial implication involved in the proposal. Keeping in view the scope of the agreement which was global in nature, the ECC gave its approval with a condition. It asked the Cabinet Division to take further input from the Planning Division and bring the matter back to the ECC if there were substantive and fundamental issues requiring further discussion and any change in the ECC’s approval.
The ECC gave the go-ahead to a proposal of the Ministry of Interior for the release of Rs670.553 million under a technical supplementary grant for the Frontier Corps headquarters in Khyber-Pakhtunkhwa (North) Peshawar for the completion of financial, procedural and legal formalities in relation to various project implementation letters. These included the upgrading of a training centre of the Frontier Corps in Warsak, Peshawar and construction of the Fata Levies Training Centre at Shakas and 10 Fata Levies check posts.
The ECC considered a proposal of the Ministry of industries for a technical supplementary grant of Rs6 billion to the Utility Stores Corporation (USC) in order to provide subsidy on essential commodities such as flour, sugar, ghee, rice and pulses. These would be sold at fair prices to the underprivileged sections of society in line with the package announced by the prime minister on November 8.
The ECC discussed the proposal of transferring Rs4 billion from the Benazir Income Support Programme (BISP) and arranging another Rs2 billion through the Finance Division.
It constituted a committee headed by PM Adviser Dawood and comprising Railways Minister Sheikh Rashid Ahmed, Privatisation Minister Muhammad Mian Soomro, State Bank Governor Reza Baqir, BISP chairperson Dr Sania Nishtar, finance secretary, industries secretary and USC managing director.
Sindh struggles to stabilise wheat prices
The committee was asked to come up with a realistic and foolproof method involving the use of information technology to ensure that the objective of the subsidy was fully met and the poor benefited from the scheme by purchasing essential commodities from 3,600 utility stores across the country.
A proposal of the Ministry of National Food Security and Research also came up for discussion as the ministry sought the release of 200,000 tonnes of wheat at Rs1,375 per 40 kg from Passco stocks for the utility stores in order to discourage hoarding and profiteering.
It suggested that the cost of Rs1.314 billion on account of price differential and incidental charges of Rs6,573.98 per tonne should be borne by the Finance Division.
The ECC approved a proposal based on a comprehensive four-year circular debt capping plan presented by the Power Division to curb the flow of circular debt through efficiency improvement measures and effective implementation of the National Electricity Policy 2019.
Under the plan, measures would be taken to improve power distribution, ensure 100% collection by five distribution companies, reduce line losses, rationalise subsidy allocation, slash the number of running and permanent defaulters and reduce power-sector flows to less than Rs75 billion per annum from the current Rs465 billion.
Published in The Express Tribune, November 14th, 2019.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.