The government on Thursday remained indecisive about banning export of tomato and onion to control their prices amid Finance Minister Shaukat Tarin’s annoyance over poor work by the Ministry of Commerce.
The Economic Coordination Committee (ECC) of the cabinet constituted a sub-committee to consider monthly projections for the export of perishable commodities on the basis of estimated production, consumption and surplus to be presented by the Ministry of Commerce, stated the Ministry of Finance.
The ECC highlighted that the decision to export onion and tomato would be taken by the sub-committee.
The indecisiveness on part of the government highlights a broken governance structure where many decisions are either taken with a significant delay or remain unimplemented due to various reasons.
As chairman of the National Price Monitoring Committee (NPMC), the finance minister had twice emphasised to ensure sufficient domestic supply of essential items by banning their export.
During the meeting, the finance minister showed his annoyance over the sketchy presentation by the Ministry of Commerce, which recommended against banning exports without providing monthly data of domestic production and consumption.
As chairman of the ECC, the finance minister said that the commerce ministry’s suggestion of not banning exports must be based on empirical data, an official who attended the meeting told The Express Tribune.
The ECC was informed that Pakistan was a net exporter of onion and a net importer of tomato. During the first three months of the ongoing fiscal year, the export of onion increased by 144% to $21.6 million from $8.82 million.
However, the export of tomato amounted to only $24,880 during the first three months of current fiscal year.
Sources revealed that the Ministry of National Food Security and Research opposed the ban on the export of onion and tomato, arguing that it might hamper exports in future and Pakistan might lose high-value markets due to inconsistent supply orders from importers.
They also stated that the ban would paint a negative image of Pakistan before the international community.
The ECC was cautioned that such a step would also cause unrest among farmers, who might prefer not to grow onion and tomato.
Read Govt to ban export of food items
The Ministry of Commerce supported the food ministry’s view that the ban on exports of these items was likely to adversely affect the image of Pakistan as a reliable supplier of onion in the international market.
The Ministry of Commerce had proposed banning export of onion and potato for one month and demanded the monitoring of prices of these commodities during that period. In case prices of these items failed to stabilise, the ban might be extended for another two months.
The ECC did not fully accept the decision of the federal cabinet to give cash benefits to the overseas Pakistanis sending remittances to Pakistan.
The ECC recommended that only those overseas Pakistanis who chose to return to Pakistan permanently should be eligible for cash redemption. The rest of the money senders will be eligible for services such as PIA ticket and mobile phone duty payments against redemption of the accumulated points awarded under the National Remittance Loyalty Programme (NRLP).
The remitters would be awarded points against remittances sent to Pakistan through legal channels.
Earlier in August 2021, the ECC had approved a Rs13.1 billion package to encourage remittances, which had become critical for sustainability of the external sector of Pakistan.
However, the federal cabinet desired that rewards earned by the remitters under the NRLP might also be redeemed in cash. On the other hand, the finance ministry was of the view that cash incentive was generally discouraged under loyalty reward schemes all across the globe.
Moreover, a majority of the NRLP users will prefer to avail cash redemption over other rewards provided by the participating public sector entities (PSEs). This will undermine the efficacy of the whole programme and the very purpose for which the scheme was initially envisioned.
The finance ministry stated that it will also result in relatively higher financial implications for the government hence redemption of points in cash under the scheme may be restricted only to the remitters who return to Pakistan permanently.
The Ministry of National Food Security and Research presented a summary to update the forum about cotton seed prices during August and September 2021. The domestic prices remained above the set threshold, with exception of a couple of days, due to rains. The ECC expressed satisfaction over the due prices received by farmers.
The ECC approved the allocation/ release of the remaining 190,000 tons of wheat to Utility Stores Corporation (USC) to ensure smooth supply of the commodity through chain of USCs across the country.
On a summary moved by the Ministry for National Food Security and Research, the ECC recommended allocation of total quantity of 300,000 tons of wheat to the Azad Jammu and Kashmir government out of Pakistan Agricultural Storage and Services Corporation’s (PASSCO) stock during the current financial year.
Published in The Express Tribune, October 8th, 2021.
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