Prime Minister Yousaf Raza Gilani has, reportedly, refused to maintain subsidised wheat price for Gilgit-Baltistan at the level of last year without the consent of the ECC, sources close to the Minister for Kashmir Affairs told Business Recorder.
Gilgit-Baltistan is a food-deficient area with wheat as the staple food of the local people. For meeting the gap between the local production and the demand of the area the government has been supplying wheat from Passco and other organisation like Trading Corporation of Pakistan (TCP), Punjab Food Department, etc, to the area for its sale at subsidised rate.
Funds for this purpose are provided in the budget of KA&GB Division, while procurement procedures are executed by the Gilgit-Baltistan government. In 2009, the quota of wheat for Gilgit-Baltistan was enhanced from 120,000 tons to 150,000 tons.
Since July, 2000, the sale price of wheat in Gilgit-Baltistan has been maintained at subsidised rate of Rs 320 per 40 kg (Rs 8000 per ton), while the price differential is picked up by the government.
The shortfall for the current financial year is Rs 3.472 billion, whereas the liabilities up to 30-6-2010 stood at Rs 5.682 billion.
Sources said that in a meeting held on April 19, 2002 by the committee constituted by ECC, under the chairmanship of Advisor to the Chief Executive for Food, Agriculture and Livestock to resolve the issue about "introduction of cascading price system for issue price of wheat in the Northern Areas," it was agreed that Passco will not claim any incidental charges.
According to sources, the KA&GB Division submitted a summary through Finance Division to the Prime Minister proposing that additional funds of Rs 9.154 billion million may be approved to clear the outstanding liabilities and meet the shortfall for the current financial year. The summary also contained different options for sale price of wheat in Gilgit-Baltistan, developed in consultation with the government of Gilgit-Baltistan.
Finance Division added its views with respect to the sale price, payment of incidental and transportation charges, constraints in commodity financing, reorganisation of civil supplies and transport department of Gilgit-Baltistan, release of Rs 1 billion during 2010-11, etc. On a summary, the Prime Minister has directed the concerned Division to place the matter before the ECC of the Cabinet for decision, and Chief Minister of Gilgit-Baltistan may also attend the ECC meeting on special invitation.
Sources further said that an internal meeting was held under the chairmanship of the Minister for KA&GB on March 3, 2011, which was attended by the Chief Minister of Gilgit-Baltistan along with his senior officers. The Chief Minister of Gilgit-Baltistan and his team were of the view that due to Atta-abadlLake catastrophe, heavy rains and flood and massive damage to cultivable land, which required four to five years to regain earlier level of productivity, it was not feasible to raise the sale price of wheat for Gilgit-Baltistan, as was suggested by them earlier.
They were of the view that, during his visit to Gilgit-Baltistan on September 29-30, 2009, the Prime Minister had announced a relief package for the area, which included continuation of sale of wheat on its current subsidised price of Rs 320 per 40 kg. They further stated that in view of two major upcoming hydropower projects at Diamer Basha and Bhoonji it was needed that this facility may continue as confidence building measure.
Keeping in view these facts, the Ministry of Kashmir Affairs and Gilgit-Baltistan made the following recommendations to the federal government: (i) subsidised sale price of wheat for Gilgit-Baltistan may be maintained at its current level of Rs 320 per 40 kg (Rs 8,000 per ton); (ii) additional funds of Rs 9.154 billion (Rs 3.472 billion shortfall for 2010-11 and Rs 5.682 billion for pending liabilities) may be allocated under demand No 127-Captial Outlay purchases by KA&GB Division; (iii) in line with the decision taken on April 19, 2002 by the committee constituted by ECC as indicated in Para 4 of the summary, the incidental charges may not be charged by Passco; and (iv) the government of Gilgit-Baltistan may be allowed to pay the sale proceeds of wheat direct to Passco rather than depositing in the government treasury.