Govt considers supplying wheat to utility stores

Staple to be sold to consumers at subsidised rates

ISLAMABAD: After the failure of Sindh and Punjab to export surplus wheat, the federal government is considering providing the staple commodity to utility stores at subsidised rates in a bid to offer the unsold stock to consumers at lower prices.

“The Ministry of National Food Security and Research has given this proposal to provinces, which will not only provide the consumers with a cheaper commodity, but also ease the burden of unsold stock,” a senior officer of the ministry told The Express Tribune.

The ministry has also suggested to the provinces that beneficiaries of the Benazir Income Support Programme (BISP) be given wheat instead of cash and instead the money be deposited directly in accounts of the provincial governments.

However, according to the officer, the proposal has not won approval of the provinces, which say that people covered by the BISP spend money not only on wheat but on other household goods as well. The argument is particularly true for rural areas, where most of the beneficiaries do not have any source of income, other than the BISP stipend and it will be unfair to force them to buy the staple only.

The officer was of the view that the supply of wheat to utility stores seemed to be a feasible option for both the government and the consumers, who would purchase the commodity at subsidised rates according to their needs. However, at present the proposal is at an early stage and the provinces have not yet come up with their opinion.

“If the provinces agree, then we will push ahead with the plan and get it approved from the Economic Coordination Committee (ECC),” he said.

A similar step had also been taken earlier by the government when it gave 700,000 tons of wheat to utility stores under the Ramazan relief package. According to the officer, the subsidy on wheat export announced by the federal government will be given to the farmers instead of exporters.

Pakistan has around six million tons of surplus wheat, but it could not be exported because of low prices in the international market.

Keeping in view the weak global market, the government had sanctioned an export subsidy of $45 per ton for Sindh and $55 per ton for Punjab.

However, the surplus produce could not be disposed of as prices in the international market stood below what Pakistan’s exporters demanded. So far, only around 220,000 tons have been shipped abroad against the target of 1.2 million tons set by the federal government.

The Ministry of National Food Security has again sent a summary to the ECC, seeking extension in the subsidy deadline which ended on July 31. This is aimed at keeping the option of export open in addition to exploring other avenues of consumption.

Published in The Express Tribune, August 8^th,  2015.

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