ECC approves 0.2m tons of wheat for utility stores

Total cost of package is Rs8.7b; USC will sell flour at existing prices

Shahbaz Rana April 14, 2020
In the first phase, 50,000 tons of wheat will be released immediately to the USC and the rest will be provided on demand. PHOTO: INP

ISLAMABAD: The federal government on Monday approved the release of 200,000 tons of wheat to the Utility Stores Corporation (USC) at new prices but USC management said it would keep unchanged the existing rates of wheat flour.

Headed by Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh, the Economic Coordination Committee (ECC) of the cabinet took the decision on a summary prepared by the Ministry of National Food Security and Research.

Total cost of the package is Rs8.7 billion, including incidental charges of Rs1.7 billion, according to a statement of the Ministry of Finance.

Unlike the past when incidental charges were paid by the federal government, this time the charges will be borne by the USC from its budgetary allocation. Wheat will be released to the USC at the new minimum support price of Rs1,400 per 40 kilogramme, which will enhance the subsidy requirement to maintain wheat flour prices at current levels.

“We will not increase wheat flour prices that will be maintained at Rs800 per 20kg bag,” said Umer Lodhi, Managing Director of USC. He anticipated that market prices would go down after the arrival of new crop.

The federal government has approved Rs50 billion for the USC as part of the Covid-19 relief package. However, unlike the past, this time the ECC did not approve separate funds for the Ramazan relief package and wheat incidental charges, pushing actual size of the relief to less than Rs50 billion.

The 200,000 tons of wheat would be released gradually for the USC from stocks held by Pakistan Agriculture Storage and Services Corporation (Passco), said the finance ministry. In the first phase, 50,000 tons would be released immediately and the rest would be provided on USC demand, it added.

Earlier, the ECC had approved the release of 200,000 tons of wheat for the USC in November last year. Out of this quantity, the USC has so far lifted 157,000 tons.

Wheat stocks have slipped below one million tons as compared to 3.7 million tons in the same period of last year. The stocks depleted due to the government’s earlier decision of allowing export of wheat and its products as well as its failure to control smuggling.

A wheat inquiry committee has held some federal and provincial government officials responsible for the wheat flour crisis, resulting in reshuffling of a federal minister, secretary and some officials in Punjab.

The new wheat crop has started arriving in markets and the Punjab food department has distributed one million sacks for wheat procurement from farmers.

The ECC chairman directed that the record of the USC and Passco may be completely computerised so that it could ensure transparency and facilitate decision-making, said the finance ministry.

However, Lodhi said the USC had already computerised the record of 122 warehouses and soon the exercise would be extended to the stores to complete the chain.

There was also discussion on data collection from private flour mills in order to ascertain the correct demand-and-supply situation of wheat and flour in the country and to ensure accuracy in decision-making.

The ECC asked the Poverty Alleviation Division to ensure transparency and efficiency in disbursement of funds to the vulnerable in the wake of Covid-19 situation in the country. Secretary Poverty Alleviation Social Safety Division assured the ECC that no one would be allowed to swindle the poor people, adding that multiple arrests had already been made and exemplary punishment would be given to those who would cheat the poor.

There have been reports that staff of the Benazir Income Support Programme swindled money out of the poorest women in the name of service charges.

The division also briefed the ECC that so far 1.7 million families had been given cash support under the Ehsaas programme, formally known as BISP, and payments to remaining families were under way.

Published in The Express Tribune, April 14th, 2020.

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