The Economic Co-ordination Committee (ECC) which is scheduled to meet on Tuesday (today) with Finance Minister, Hafeez Shaikh in the chair will fix 6.57 million tons wheat procurement target for 2010-11 and allow the exporters to continue wheat export till the end of procurement season, official sources told Business Recorder.
A high level committee headed by Minister for Food and Agriculture (Minfa) and comprising Minister for Ports and Shipping, Deputy Chairman Planning Commission, Governor State Bank of Pakistan and Secretary Minfa finalised the recommendations for the ECC in its meeting on February 3, 2011. Secretary Minfa informed that the current wheat stocks with the public sector are around 6.65 million tons. The pace of releases to the flourmills remained relatively slow compared to the last year.
According to him, it is now on the increase due to issuance of wheat on time to private sector exporters. Secretaries Food Punjab and Sindh emphasised that the export of wheat should continue and no abrupt closures should be ordered. Federal Minister for Food and Agriculture as well as Federal Minister for Kashmir Affairs and Gilgit-Baltistan supported the said suggestion.
Minister for Minfa underscored that government is committed to create enabling environment and policy framework for speedy export of wheat, as it will reduce wheat stock and financial burden of the public sector. Secretary Minfa suggested that PASSCO may also be allowed to sell its wheat to the private sector for export and the cost differential should be picked by the Finance Division. This would provide a level playing field for the PASSCO in disposal of its wheat stocks. The Additional Secretary, Finance Division also endorsed the proposal.
The position of wheat crop 2010-11 also came under discussion. Secretary Food Sindh informed that time current wheat crop prospects are better and the expected crop size would be over 3 million tons in the province. Similarly, Secretary Food Punjab pointed out that crop condition is satisfactory in the province although the area sown in 16.5 million acres which is 3.4% less than last year.
Agricultural Development Commissioner was of the view that wheat crop in Sindh and Punjab province was sown late which has its own repercussion on production. Mian Manzoor Ahmad Watto, Federal Minister for Kashmir Affairs and Gilgit-Baltistan desired that the spread of high yielding wheat varieties should be promoted by Minfa and specific seed programs be started in collaboration with Punjab and Sindh Seed Corporations or an independent initiative at the federal level be taken.
An extended discussion was held on tire issue of fixation of procurement target by the public sector from wheat crop of 2011. The provinces showed concern regarding the commodity financing for procurement. The State Bank of Pakistan''s representative raised the issue of circular debt and possibility of facing liquidity shortage while executing wheat procurement drive.
In this connection, a letter dated January 8, 2011 written by the Governor, State Bank of Pakistan was placed before the committee and its contents were thoroughly discussed. Minister for Minfa asserted that wheat is vital for food security and the only crop for which government announces Guaranteed Minimum Price (GMP) / support price.
It is imperative to ensure that despite all odds, farmers get announced GMP. There was a consensus to fix a procurement target in line with procurement of last year by provinces and PASSCO. After detailed deliberations, the committee made the following recommendations; (i) wheat and wheat products export should be continued and Government may not ban export during wheat procurement season.
A suitable cut off date may be announced for wheat exports, as and when required, with a reasonable cushion to give enough time to the exporter to fulfil their contractual obligations the wheat crop should be monitored regularly to be able to take timely decisions; (ii) PASSCO and provincial food departments should establish one million ton of strategic wheat reserves proportionate to their wheat procurement targets for the next food year; (iii) the wheat procurement target will be 6.57 million tons as per following details- PASSCO, 1.30 million tons- Punjab, 3.50 million tons- Sindh, 1.30 million tons- Khyber Pakhtunkhwa, 0.40 million tons and Balochistan, 0.07 million tons.
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