Government has decided to restrict wheat procurement to the public sector in an effort to build strategic reserves at an indicative issue price of Rs 975 per 40 kg for the year 2010-11. Sources revealed to Business Recorder that the Economic Co-ordination Committee (ECC) of the Cabinet in its meeting held on September 21, 2010, had constituted a high level committee to review the existing purchase policy of wheat and in the next meeting it recommended restricting wheat purchase for maintaining strategic reserves to the public sector.
The committee comprised of Minister for Food and Agriculture (Convenor), Minister for Ports and Shipping, Deputy Chairman Planning Commission, Governor State Bank of Pakistan (SBP) and Secretary Food and Agriculture.
The ECC considered the summary submitted by Ministry of Food and Agriculture on 'Fixing of Indicative Issue Price of Wheat Year 2010-11' and approved: (i) indicative issue price of wheat at Rs 975 per 40 kg for 2010-11; and (ii) cascading price as deemed appropriate.
During discussions, the ECC members enquired why the federal government was fixing the indicative price when subsidy is to be picked up by the provinces. It was decided to review the present policy of purchase of wheat and restrict the public sector purchases to strategic reserves only.
ECC was informed that wheat production for the year 2009-10 was 23.8 million tons. Passco and the Provincial Food Departments procured 6 to 7 million tons during the current year. With carried forward stocks of 1.2 million tons; the current wheat stock position in the public sector is 10.5 million tons. ECC was further informed that to stabilise prices of wheat and flour, the government fixes procurement price and issue price of wheat every year. The difference between the procurement price including incidentals and the issue price is borne by the respective provincial governments as subsidy.
ECC was also informed that for the previous year, the Cabinet, in its meeting held on 03-06-2009, had fixed the support price at Rs 950 per 40 kg, while the issue price was fixed at Rs 975 per 40 kg. The Ministry of Food and Agriculture, proposed that indicative issue price may also remain as Rs 975 per 40 kg for 2010-11.
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