The Economic Co-ordination Committee (ECC) of the Cabinet has directed the Ministry of Food and Agriculture (Minfa) to consult stakeholders, especially the provinces, before finalising paddy procurement plan, official sources told Business Recorder.
On September 29, Minfa, in its summary had proposed that the government should procure one million tons of paddy in the current season through leasing of rice mills by the public sector organisations.
This proposal had been prepared in the light of the ECC's earlier direction in which it had directed to the sponsoring Ministry to develop an effective mechanism to implement the intervention price of paddy. Minfa also suggested that Pakistan Agriculture Storage and Supplies Corporation (Passco) should be asked to procure 40 percent of total allocated target while the Food Departments of the provinces would procure 60 percent of the allocated target, based on variety and area sown in the respective provinces.
Sources said that the ECC was informed that the current market price of paddy is lower than the intervention price and timely intervention for procurement mechanism is crucial. On the issue of procurement, Passco explained its inability to undertake the task of procurement for want of specialist staff and storage space. It was observed that the stakeholders, especially the provinces, were not taken on board on the proposals forwarded by the sponsoring Ministry.
Since the summary was tabled during the meeting as an additional item, the participants had limited time for its examination to formulate considered recommendations, sources added.
After brief discussion on the issue, the ECC emphasised that the sponsoring Ministry would undertake consultations with the stakeholders, especially the provinces, and submit well considered proposals in the next meeting of ECC on October 6, 2009.
Last year, the government had announced intervention price of Rs 1,500 per 40 kg for super basmati, Rs 1,250 for basmati-385, and Rs 700 for Irri paddy. The interaction by Passco and TCP stabilised the prices which averaged at Rs 1,181 per 40 kg for Basmati paddy, Rs 660 for Irri paddy in Punjab and Rs 585 in Sindh.
The Agriculture Policy Institute (API), an attached department of Minfa, was tasked to propose reasonable paddy prices for the current crop, keeping in view the ground realities like input prices. It has estimated the cost of production of basmati and Irri paddy in the Punjab at Rs 972 and Rs 606 per 40 kg which implies that cost of production estimates are higher by 24 percent and 26 percent over last year.
The Irri cost of production in Sindh has been calculated at Rs 490 per 40 kg, showing an increase of 24 percent over last year's. Major factors of higher cost of production are land rent, tractor rates, tube well water and wage rates. The domestic price during 2008-09 for Basmati paddy averaged at Rs 1,181 per 40 kg during October-February in the Punjab ranging between Rs 1,020 to Rs 1,298 per 40 kg.
The market price of Irri paddy in Punjab averaged at Rs 660 per 40 kg during the same period ranging between Rs 579 to Rs 726 per 40 kg. In Sindh, the market price of Irri paddy averaged at Rs 585 per 40 kg during November - February ranging between Rs 535 to Rs 686 per 40 kg.
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