Surplus wheat: Only 20% of 1.2m-ton target exported

Deadline for subsidy payments expired on May 15.

ISLAMABAD: The government has been able to export less than 20% of the target of 1.2 million tons of wheat by the end of the deadline set for the provision of subsidy by the Economic Coordination Committee (ECC) of the cabinet in January this year.

The ECC, in its meeting held in January, fixed May 15 as the deadline for subsidising the export of 1.2 million tons of surplus wheat with $45 per ton subsidy for Sindh and $55 for Punjab. The subsidy was given to facilitate farmers keeping in view the high price of wheat in Pakistan compared to rates in the international market. The farmers though did not benefit in a true manner due to the absence of an effective and well-coordinated policy to handle the exports.

A source in the Ministry of Commerce said the government had managed to export only 175,000 tons of wheat so far.

The federal government had even allowed provincial governments to independently export the commodity if they could through private parties and provincial authorities, but even this strategy failed to work, said the source.

“Now, the deadline for subsidy on the export of wheat has ended and no further concession will be provided on its export,” the official said.

It was learnt that the Ministry of National Food Security and Research was no more interested in extending the subsidy period as it realised that without a proper mechanism for export, the incentive alone would not work, as experienced in the past four months.

An officer of the ministry blamed for the mismanagement the lack of coordination between provincial and federal governments as well as between the government departments concerned.

The hurdles were not faced in the way of wheat export only. A similar subsidy of Rs14 billion was given to the farmers on fertiliser sales, which was announced in the budget, but it also could not be fully received due to failure of the Ministry of Industries and Production and the Ministry of National Food Security and Research to establish a proper mechanism for implementing the package.

At present, at least four million tons of surplus wheat is available with the provincial governments and the Pakistan Agriculture Storage and Services Corporation (Passco), which would be carried to the next year as another bumper crop is expected this season.

“Farmers are worried as they are not getting a fair price for their produce and will again face the same situation in the next season,” said the officer.

The only effective mechanism for facilitating and promoting the interest of farmers was to reduce the cost of production for the agriculture sector, which would better compensate the growers, he suggested.

Published in The Express Tribune, May 22^nd,  2015.

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