ECC approves Rs1,650 wheat price

It is 18% higher than current official price but 27% lower than market rates

ISLAMABAD:

The cabinet’s economic decision-making body on Friday approved a minimum wheat procurement price of Rs1,650 per 40 kilogramme - about 27% lower than the prevailing market rates, and also increased wheat import quantity to 2.2 million tons to meet shortfall.

“After detailed discussion, the Economic Coordination Committee (ECC) approved minimum support price for the wheat crop at Rs1,650 per 40 kg,” according to a statement issued by the Ministry of Finance. The ECC decided to keep unchanged the current release price - at which the government provides wheat to millers for grinding - at Rs1,475 per 40 kg, it added.

The ECC decided to increase the imported wheat quota for the public sector from 1.8 million tons to 2.2 million tons to bridge the shortfall in Punjab - the largest wheat producer. The country is importing wheat due to mismanagement by the Pakistan Tehreek-e-Insaf (PTI) government. It was the second time that the ECC approved the minimum support price in two weeks after the federal cabinet rejected the earlier approved price of Rs1,600 per 40 kg. The new price is Rs250 or 18% higher than the current official price but it is 27% or Rs600 lower than the prevailing market rates. For the new crop, the food ministry has estimated the cost of production at Rs1,587 per 40 kg, an increase of Rs237 or 17.5% within six months. The decision came a day after an injured farmer, Malik Ashfaq Langrial, died in Lahore, allegedly due to police baton charge. Farmers were demanding that the government set the new wheat support price at Rs2,000 and sugarcane price at Rs300 per 40 kg.

“The Rs1,650 price is not acceptable to us as the minimum wheat production cost ranges between Rs1,700 and Rs1,800,” said All Pakistan Kissan Foundation Chairman Syed Mehmoodul Haq Bokhari, while speaking in the Express News programme - The Review. The federal government decided to set the next wheat procurement price unilaterally after Sindh refused to accept the rate of Rs1,650 per 40 kg. The federal and Sindh governments on Wednesday could not agree on a new wheat support price. The Sindh government wanted an increase of almost 43% and suggested a price of Rs2,000 per 40 kg for the next crop.

Two different prices can result in hoarding and smuggling from one province to another, making matters worse for the federal government. Higher prices in Sindh will also make it difficult for the Punjab government to procure wheat at the minimum price without resorting to coercive measures, according to finance ministry officials. Since 2010-11, the support price of wheat has been revised four times. Punjab - the largest wheat producer - wanted the price to be set at Rs1,650 per 40 kg. The Khyber-Pakhtunkhwa (K-P) government proposed a price of Rs1,880 and Balochistan wanted it to be fixed at Rs1,700.

The Ministry of National Food Security had proposed Rs1,745 per 40 kg. The finance ministry said that after thorough consultation, the ECC also approved the grinding ratio of wheat at the base level of 70:30. It was further decided that the ratio for refined varieties of wheat flour would be decided by the coordination committee later. The ECC approved aggregate release of 38,000 tons per day to flour mills. Representatives of all the provincial governments were on board, said the finance ministry. This included 25,000 tons by Punjab, 8,000 tons by Sindh, 4,000 tons by K-P and 1,000 tons by Balochistan. The ECC also approved the request of the government of Punjab to provide additional 700,000 tons of wheat, out of which 400,000 tons would be imported by TCP for Punjab.

In a meeting with Prime Minister Imran Khan on Thursday, the Punjab chief secretary said that the province was facing a shortfall of 1.4 million tons. On directions of the prime minister, the ECC decided to set up a coordination committee to deal with the import of wheat and its logistics and distribution to the recipient agencies. The committee will be chaired by the finance adviser and will include adviser to the PM on institutional reforms and austerity, minister for industries and production, SAPM on revenue, federal minister for national food security and research and State Bank of Pakistan governor. It will also include secretaries from finance, national food security and research, communications, commerce, maritime affairs, railways divisions and chief secretaries of Balochistan, K-P, Punjab and Sindh for smooth coordination. The ECC also approved technical supplementary grant for the settlement of outstanding dues of non-litigant retired employees of Pakistan Steel Mills (PSM) amounting to Rs11.7 billion