ISLAMABAD: The federal government is to provide wheat to the provinces on the basis of 50:50 (50 percent local 50 percent) imported formula from its stock, well informed sources told Business Recorder.

Pakistan Agricultural Storage and Services Corporation Limited (PASSCO) is a state-owned company which serves as a strategic organization to procure wheat from Punjab, Sindh and Balochistan to build strategic reserves to supply Pak Army, Air Force, Utility Stores Corporation (USC), AJK, Gilgit-Baltistan (G-B) and the provinces, in case of emergency.

Every year, on the request of recipient agencies, PASSCO makes allocation of wheat from its stock. In this context, Ministry of National Food Security & Research moves summaries to the ECC on case-to-case basis, for obtaining formal approval of the Cabinet.

According to the sources, in a consultative meeting with recipient agencies on June 06, 2022, it was noted that PASSCO held wheat stock of 2.499 MMT, including 1.232 MMT carry-forward stocks. The stock availability comprised of local and imported wheat at 50:50 ratio. Therefore, it was decided that local and imported wheat would be supplied amongst recipient agencies at the same ratio i.e., 50% local and 50% imported commodity.

A consultative meeting was convened by the Finance Division on August 29, 2022 which was chaired by the Finance Minister.

The meeting decided that PASSCO should provide wheat to USC at the ratio of 75% local and 25% imported wheat. The ratio for other recipients would be at 50% local and 50% imported wheat.

In light of decision at the meeting, Ministry of National Food Security and Research has recommended to the Economic Coordination Committee (ECC) to supply PASSCO’s wheat among all recipients at 50% local and 50% imported. However, USC will be provided wheat at 75% local and 25% imported. All recipients, including USC, would be liable to pay full cost of wheat (local and imported) and incidental charges to PASSCO and there will be no financial liability on the part of the federal government. Finance Division has endorsed the proposal given that there is no financial implication involved for the federal government for releasing local and imported wheat at 50:50 ratio at full cost and incidental charges of PASSCO. However, Ministry of National Food Security and Research has been requested to incorporate rationale for releasing imported and local wheat at 50:50 ratio instead of First-In First-Out (FIFO) basis in the summary.

The ministry has further been requested to highlight impact on incidental charges of PASSCO and include the same in the summary for an informed decision-making by the competent forum.

Ministry of National Food Security and Research, in its summary for the ECC has intimated that a 50:50 formula is based on stock availability of PASSCO and higher demand of recipients for local viz-a-viz imported wheat. The incidental charges were fixed in 2018-19 by the Finance Division and since then have not been amended. Incidental costs are charged on the actual basis.

Copyright Business Recorder, 2022