Wheat supply: Finance ministry refuses to clear all PASSCO dues

An amount of over Rs30b has accumulated against G-B since 2009

ISLAMABAD: The Pakistan Agriculture Storage and Services Corporation (Passco) is facing difficulties in the purchase of wheat as the Ministry of Finance has refused to pay the outstanding Rs25 billion, which is owed by the Gilgit-Baltistan (G-B) government.

The outstanding amount against the G-B government has been piling up since 2009, after the federal government decided to withdraw the subsidy on wheat provided to the region from Passco’s storages. The amount crossed Rs30 billion in April this year.

According to sources, after Passco’s demand, the finance ministry agreed to pay Rs7.9 billion of the current year’s arrears but refused to pay over Rs25 billion accumulated in previous years due to shortage of funds.

“The federal government has not honoured its commitment to clear the dues, creating problems for us in procuring fresh stock from farmers,” a senior officer of Passco told The Express Tribune.

He said the ministry had only agreed to pay the current year’s dues, which amounted to Rs7.4 billion. “When we took up the issue of other dues, the ministry said it will be resolved at a later stage,” he added.



Meanwhile, an official of the Ministry of Kashmir Affairs said Passco had resumed wheat supply to G-B after a brief suspension last year and soon 10,000 tons would be dispatched to overcome the shortage in the region.

The federal government has been giving special subsidy on wheat supply to G-B since the 1970s, which was introduced by the then PPP government and continued for decades.

The previous PPP government in 2009 took a decision in the ECC to end the subsidy for the region, but it was not implemented.

The PML-N government, tried to implement the ECC decision by increasing the wheat price in 2014 from Rs12 per kg to Rs18 per kg, but the move was blocked again by the local people, who staged a two-week sit-in in Gilgit and Skardu.

After negotiations, the federal government reduced the wheat price to Rs13 per kg with a promise that it would clear the dues and pay the difference between the wheat support price and the rate on which the commodity was sold to G-B.

Published in The Express Tribune, May 15^th, 2015.

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