The provincial government of Khyber Pakhtunkhwa has decided not to borrow loans from the commercial banks for the purchase of wheat and will utilize its credit in the Food Account, properly known as Account-II of Food Department to avoid the payment of mark-up.
The KP Department of Khyber Pakhtunkhwa in consultation with the federal government and approval of Chief Minister has fixed a procurement target of 0.300 million metric ton from the local growers etc @ Rs 1300/- per 40 kg.
The growers are encouraged to offer their wheat to Food Department, Khyber Pakhtunkhwa for sale enabling it to meet the set target. The provincial government will purchase wheat worth Rs 9.75 billion.
In case the procurement target is met in July or partially, the department would save Rs 200 million on account of interest and Rs 300 million on transportation charges to the provincial exchequer, which are required to be paid to Punjab or PASSCO as incidental and transportation charges.
The wheat purchased locally or from Punjab/PASSCO is stored in 27 PRCs/Godowns spread all over the province having capacity to store 400.000 M tons. The department plans to increase this capacity up 600,000 M tons. Besides, the department has planned to switch over to mechanized silos system. Efforts are underway to carry out feasibility study through international experts. In order to provide cheaper wheat flour to the general public, the food department releases wheat to the flour mills at less price than the landed cost and this burden is taken up by the provincial government in the shape of subsidy.
During last six years, the department has issued a quantity of 261,521 tons of wheat at subsidized rate to the flour mills for which the finance department has released an amount of Rs 2900 million in the budget 2017-18. For the current financial year 2017-18, the department has demanded another amount of Rs 2900 million.