Buying rice at higher than market price: investigation to be initiated against TCP

The government is reportedly initiating an investigation against the Trading Corporation of Pakistan (TCP) for procuring rice at above the market price, sources told Business Recorder. They said that the Economic Co-ordination Committee (ECC) of the Cabinet had directed the TCP to procure500,000 tons processed rice, made up of 300,000 tons non-basmati rice (Irri-6 & KS-282), and 200,000 tons Super Basmati rice, on the basis of open tenders.
It had also been directed to float tenders immediately, on December 6, 2008, for purchase of 20,000 tons Irri and 100,000 tons Super Basmati rice. Tenders for the remaining 200,000 tons were to be floated, by TCP, on the subsequent, written, advice of Ministry of Food and Agriculture.
Sources said that TCP was reported to have procured both varieties of rice from the market, as Reap had refused to give the price. The ECC was apprised on December 30 about a meeting presided over by Prime Minister Yousaf Raza Gilani regarding procurement of rice by TCP as a price support initiative.
IN THE MEETING, FOLLOWING DECISIONS WERE TAKEN:
(i) TCP will vacate its storage godowns at Pipri , Karachi which have a storage facility of 0.5 million to 0.6 million tons by the second week of December 2008, to make space for stocking rice, which it would procure from the open market;
(ii) TCP will, on availability of sufficient stocks, find export markets for this rice, and do so in a transparent manner through international tenders;
(iii) Minfal will set up a committee comprising its own experts to inspect the rice to be purchased by TCP, and certify its quality. Only then will TCP allow such purchased rice to be stored in its godowns.
Sources said that a committee, headed by Minister for Food and Agriculture, had been constituted to supervise the process of export of rice stocked by TCP. They said that TCP had been directed not to offload any rice into the local market or into the international market till written advice was received from the Ministry of Food and Agriculture.
When the Commerce Ministry sought ex post facto approval of the Prime Minister's decisions from the ECC headed by Finance Advisor Shaukat Tarin on December 30, 2008, some ECC members were reported to have pointed out that in the recent past, due to scarcity of fertiliser, rice crop was also partly affected.
It was suggested that the support price of rice should be fixed before harvesting stage so that the small farmers should reap benefit. In case the support price was fixed after harvesting it would benefit the middleman only.
In this regard it was suggested that a task force under the chairmanship of Minister for Food and Agriculture and Ministers for Industries & Production and Privatisation, Deputy Chairman Planning Commission, Secretary Finance as its members be constituted and Secretary Food and Agriculture will act as its Secretary.
The task force would develop coherent strategy on four major crops ie wheat, cotton, rice and sugarcane, evolve a rational support price mechanism for the aforesaid crops and recommend measures to ensure need based availability of the items throughout the year with equitable benefit to the small farmers and consumers.